Real Estate Short Sale
A real estate short sale is a type of agreement sometimes offered by mortgage lenders to borrowers who have fallen behind on home loan payments. In order to obtain short sale approval certain eligibility requirements must be met. While short selling offers financial relief to borrowers, it might not be the best strategy.
The real estate short sale process can take between three to six months to complete. The first step involves contacting the bank loss mitigation department. In addition to handling short sale real estate, loss mitigators also work with borrowers to obtain loan modifications, mortgage refinancing and deed in lieu of foreclosure transactions.
The reality is it can take bank loss mitigators several weeks to return a phone call. In some instances, it is best to send letters via certified mail with a return receipt request. This postal option requires recipients to sign a card which is returned to the sender and provides proof the letter was received. Certified letters sometimes receive priority action over phone calls and email correspondence.
Not all properties or borrowers qualify for short selling. Banks do not extend short sale approval to borrowers whose property has entered into foreclosure. Therefore, it is crucial to be proactive and take all necessary measures to contact mortgage lenders before Lis Pendens is issued through the court.
Properties with accrued home equity are ineligible for short sales. Borrowers who possess financial portfolios with assets that can be sold to cure mortgage arrears will not qualify for short sale authorization. Overall, short selling is an option available only to borrowers owing more than the appraised value of their home who do not possess financial assets.
When bank loss mitigators are willing to entertain the option to short sell real estate, borrowers must adhere to their bank's short sale protocol. Although protocol varies by lender, most require borrowers to submit various financial records along with a hardship letter outlining events that caused them to fall behind with home mortgage loan payments.
In most cases, banks do not grant short sale approval unless borrowers have a qualified buyer in place. Unfortunately, this creates a catch-22 situation in that borrowers can't list their property as short sale real estate for sale until permission is obtained through the lender and permission isn't granted unless a buyer is in place.
Due to the complexities involved, it is best to retain the services of a real estate lawyer or short sale specialist. Negotiating short sale real estate transactions can be complicated and confusing; particularly when buyers are unfamiliar with legal contracts and real estate jargon.
One crucial element of entering into short sales is to fully understand the type of agreement offered through your lender. The majority of banks are now issuing mortgage deficiency judgments against borrowers for the difference between the short sale price and loan balance. Deficiency judgments can amount to several thousand dollars and oftentimes force borrowers into personal bankruptcy.
Some mortgage lenders accept the short sale price as payment in full toward loan satisfaction. Referred to as 'Payment in Full' short sale, this option gives borrowers the opportunity to return their home to their lender and walk away without owing additional funds.
If you are facing foreclosure and are looking for information to help you make an informed decision, we invite you to visit our real estate short sale article library. Topics include mortgage refinancing, deed in lieu of foreclosure, loan modifications, advantages and disadvantages of short selling and much more.
If you qualify for real estate short sale and need a buyer, submit information about your house via the 'We Buy Houses' form. Upon receipt of your information, Simon Volkov will contact you to discuss available options.
Published on February 22, 2010 at 01:34 AM
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