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Sacramento Short Sale Info

Sacramento Short Sale Information

More banks are guaranteeing ten  day approvals on Sacramento short sales, these servicer’s are gearing up for compliance of the new HAFA or Home Affordable Foreclosure Alternatives Program. New HAFA Program (another government foreclosure acronym to remember!)


Through these reforms, the short sale process will be enhanced. Mortgage servicers will have 10 days to accept or reject a short sale request, and after the transaction is complete, it is possible that the borrower could be completely released from debt. Financial incentives will be provided to borrowers selling their home through a short sale and to mortgage-servicing companies completing short sale transactions. The basics of the Home Affordable Foreclosure Alternatives Program financial incentives for completing short sales or a deed-in-lieu of transaction are:

 

 

Short sales are becoming more commonplace, the servicers, banks, secondary investors are all getting systems in place and training staff in order to facilitate a faster proces… however; a short sale in real estate cab still be a very unpleasant transaction. There are tons of horror stories circulating in the real estate market about short sales.

Examples:

Approval  taking 6,7,10 plus months.
Lenders requiring the home owner to contribute thousands of dollars.
Tax Ramifications.
The home being foreclosed on during the short sale process.
 

During a short  sale transactions, all of these things and many more are possible. It is important to remember, the United States has never been in this situation before. The lending institutions have never had to deal with the extreme number of foreclosures. Until recently the term “short sale”  was really only used in the stock market, not in the housing market.  Loan modifications were unheard of, there was no such things as a short refinance.

All of this came crashing down on the lending institutions. Most of them have done a fairly decent job of emplementing systems for dealing with all these new alternatives. However, many have not.

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a “short sale.”

More than half of my sales in Sacramento over the past few years are short sales. That’s how prominent short sales have become.

When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.

If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers:

As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.

Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.

Submit Letter of Authorization
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:

Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.

Read more about Before you Buy a Short Sale.

Click Here For Page Two About Short Sales