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Short Sale Considerations

September 26, 2016 Blogs No Comments

What Are The Important Short Sale Considerations?

With a short sale, one may have the option of selling their home for less than the total amount owed on the mortgage note. The goal of a short sale is to gain permission from the powers to be of the note to liquidate a distressed asset in hope of potentially being released from the obligation to pay back the full mortgage amount under its original terms. Also, if a borrower is in foreclosure on their property a short sale may be an option to avoid foreclosure; Furthermore, it may still be possible even if foreclosure proceedings have already began on the property. A short sale is a useful workout option for borrowers who are financially bleeding on an underwater real estate asset or who are looking to avoid foreclosure, reduce potential liabilities of the note, obtain more time in the home, and even receive potential relocation monies.

A short sale is never guaranteed to be completed successfully. Completion will come down to many different factors, ranging from borrower delinquency and financials, lien position and value,  and mortgage servicer, mortgage insurance, and investor guidelines. There are a few things to keep in the forefront of your mind when completing a short sale.

Key Short Sale Considerations

If your mortgage qualifies for a short sale:

  • In most cases the buyer of your home cannot be anyone who you have a business or close relationship with including friends and family. This would be deemed as a violation an arms-length transaction.
  • Depending on what state you are in and other factors, you may be required to pay a deficiency balance at or after closing. A deficiency balance is the difference between the proceeds received by the mortgage lender and the total amount owed. If a deficiency balance is not going to be settled it is generally reflected on the short sale approval letter. Certain investors and states do not allow deficiency judgments and others do.
  • A short sale or settlement must be reviewed with all lien holders that are underwater. It is not the case that all accounts are always worked by the first mortgage or together simultaneously.

*Note* Keep in mind that a foreclosure may have tax, credit, and other implications on the same level if not greater than a short sale, so be sure to consult with the respective professionals.

  • A short sale may have tax implications. It’s important to check with your tax professional to see if you may have tax liabilities after the competition of a short sale.
  • There may be additional implications of a short sale to credit and other areas of your life. Be sure to speak with your legal advisor about all potential implications.
  • A short sale may be complicated or unworkable depending on how many liens are on title and other specific factors related to your account and circumstances.
  • A short sale is generally reported to credit agencies by the lender as “paid in full for less than the full balance”, or an agreed settle short of full payment.

This is not an ideal solution, but many times though it is the only resolution to get out of a sensitive and difficult situation with as little scratches as possible.

To speak to a short sale professional, please fill out the form below and you will be contacted right away.

VA Compromised Sales

September 19, 2016 Government SS No Comments

VA Compromised Sales Short Sale Help

When a veteran gets a VA loan to purchases a home there is a guarantee from the VA on it up to a certain amount. When a borrower who has obtained a VA loan has a property that is underwater and they want to sell they will need to go through the VA short sale program which is called a VA Compromised Sale. A VA Compromised Sale has strict guidelines governed by the VA. One of the most important guidelines is their Minimum Net of 84.05 which was changed from 85.05 towards the end of 2015. The mortgage servicer will send out a VA appraiser to conduct a valuation on the property and when it returns they will want the NET proceeds to the 1st mortgage to be at a minimum of 84.05% of the appraised value.

When it comes to a VA Relocation Assistance, it’s minor. The servicer is authorized to approve $1,500 towards the borrower to relocation but generally this is only approved if the property is occupied and the minimum NET would need to be exceeded by at least $1,500.

For an expert opinion, support, or if you just need to be pointed in the right direction, fill out the form below for immediate assistance.

Ditech 2nd Mortgage Short Sale

September 9, 2016 Blogs, Ditech No Comments

Ditech 2nd Mortgage Short Sale

Ditech is a mortgage servicer and it appears a large volume of the loans they service are Fannie Mae (FNMA) backed notes when in 1st posistion. Fannie Mae is a Government Sponsored Enterprise (GSE) and their guidelines will govern the short sale if it is FNMA backed. When they are in 2nd position it may be a Home Equity Line Of Credit or a 2nd with a private investor. When in 2nd position Ditech will request a copy of their own short sale package as part of their application. This differs from the 1st mortgage which does not necessarily have their own package but does require investor related documents that are applicable.

Ditech in 2nd position may play ball with a 1st lien holder that is participating in HAFA. If the debt is charged off a 2nd mortgage settlement may be an option too. Ditech in 2nd position generally has shorter time frames for a workout review than when under review with a Ditech serviced 1st note.

For an expert opinion, support, or if you just need to be pointed in the right direction, fill out the form below for immediate assistance.

Nationstar Xome

August 29, 2016 Nationstar MTG No Comments

Nationstar Xome Help

Nationstar has gone through a few different online auction platforms over the years. They used auction, Homesearch, and now Xome to open short sale transactions to the public. Depending on the investor on the note will determine if the servicer pushes the    online auction as a contingency for short sale review.

Even if an offer is already submitted, fully executed, and under review for a short sale, If it gets flagged and placed by Nationstar Xome, the accepted  buyer could be outbid and replaced. Most bidders will be subject to a 5% premium. The original buyer submitted for review is generally exempt from this premium.

Many people don’t want to participate in Nationstar Xome or the other auction platforms for a short sale. From our experience very rarely have we see. Any accounts once flagged for the online auction to ever move forward without going on it. Nationstar typically will not move forward with he review unless if the borrower agrees to participate in the auction once the account is designated to partake in it.

For an expert opinion, support, or if you just need to be pointed in the right direction, fill out the form below for immediate assistance.

HAFA Deadline December 30, 2016

August 22, 2016 Blogs No Comments

The HAFA Deadline for applying currently is December 30, 2016. HAFA provides borrowers and tenants the opportunity to leave a property through a short sale sale or a deed-in-lieu of foreclosure (DIL) while providing a relocation incentive of $10,000. It also allows a borrower to settle their remaining mortgage balance and not be pursued for the deficiency. Many Mortgage companies nationwide participate in HAFA and if they don’t, they may offer a similiar in house program. Many government backed loans don’t participate in HAFA, but may offer other relocation incentives, yet many times, it’s considerably less.

HAFA is one of the best programs available for distressed borrowers.

You might be eligible if you meet the following criteria:

  • Struggling to make mortgage payment
  • Mortgage originated on or before January 1, 2009.
  • Non condemned property
  • Balance of $729,750 on your primary residence or one-to-four unit rental property (loan limits are higher for two- to four-unit properties).

HAFA may or may not be extended at the years end, if you are in a tough position, you may want to consider applying sooner than later. Fill out the form below and you will be contacted shortly by a professional.

Short Sale Settlement

August 11, 2016 Blogs No Comments

Help Short Sale Settlement

Homeowners who have borrowed money via an instrument of mortgage or deed of trust have a financial duty to pay the note holder. The deed of trust or mortgage is recorded which secures their interest. During the financial crises it was further brought to light of many borrowers over leveraging and being provided with potentially predatory loans which when adjusted made the payments unaffordable to the borrower. Coupled with real estate prices going down many borrowers were pushed into foreclosure situations while holding underwater real estate assets.

Borrowers who have underwater and non performing homes often want to sell. When you can’t pay the debt on the home in full then a short sale settlement is needed. A short sale settlement is a process in selling the home for less than what is owed and shorting the lien holders on the home. The goal is to settle all debt with the lien holders on title. Short sale settlements exist to help borrowers reduce liabilities while liquidate non performing and underwater real estate assets. There are many benefits to a short sale when it comes to cutting losses, potentially reducing liabilities on the debt, receiving money from the bank and overall reduce hardship of the borrower.

If you need assistance with a short sale settlement, please fill out the form below.

Wholesaling Short Sales

August 3, 2016 Blogs No Comments

Wholesaling Short Sales Help!

Many investors are interesting in Wholesaling Short Sales; They come across underwater assets and place offers with the intent of selling the contract. The standard assigning of contracts does not work in the world of short sales. The banks are savvy and will not allow that verbiage or the assigning of contracts. Short sale reviews are buyer specific so if the buyer changes, the review will need to start back over. Also, a wholesale fee on the settlement statement likely will be denied by the mortgage servicer when asking for settlement statement approval to close.

Wholesaling Short Sales also faces other challenges. There is generally a 30 day deed restriction in transferring title. Some investors require that the property can not be transferred within 90 days for more than 120% of the purchase price. Banks have taken measures to prevent investors from Wholesaling Short Sales.

For questions on anything short sale related, feel free to fill out the form below and you will be contacted shortly by a specialist in our office.

Should I Pay My HOA Dues?

July 25, 2016 Blogs No Comments

Should I Pay My HOA Dues If I’ve Defaulted On My Mortgage?

This is a common predicament and question borrowers face when they own a property with a Homeowners Association and they have or will be in default on their mortgage on their property. “Should I pay my HOA dues if I have already defaulted on my mortgage?”, at the end of the day, if you can not make the payments that you are obligated to make then what are you supposed to do?; There are consequences and potential repercussions associated with those actions though. Some challenges owners face when they do not pay their HOA dues is that it will incur interest, late charges, and potential foreclosure fees, skyrocketing the balance to a point of no redemption in plain sight. When the borrower ultimately try’s to sell via a traditional or short sale, that balance will need to be paid or settled. If the train gets too far away and the HOA initiates foreclosure or places a lien on the property, it is one more thing a borrower needs to address.

Some HOA’s can be very aggressive and tough to negotiate with which is why many people are advised to make their HOA payments even when their mortgage is delinquent if they are seeking resolution with their property. A HOA who is owed money can play hardball on settling, making a sale extremely tough to complete as depending on the transactions circumstances and the numbers, getting the HOA the money they want can be difficult to accomplish.

For an expert opinion, help, or if you just need to be pointed in the right direction, fill out the form below for immediate assistance.

Los Angeles Short Sale

July 18, 2016 Blogs No Comments

Los Angeles Short Sale Help

High quality short sale help is tough to come by. Los Angeles Short Sales are often cutthroat so it’s important to have someone in your corner who has your best interest and same goals. Having an experienced team in your corner who has the experience to create a custom strategy to accomplish the party’s goals is very important. An experienced negotiator should know the following to be best equipped to create a game plan for success:

  • Mortgage Servicer Guidelines
  • Investor Guidelines
  • Relocation Incentives Per Investor Guidelines
  • Escalation Contacts Per Mortgage Servicer
  • California Short Sale Rules & Regulations
  • Initial Game Plan In Accordance With Bank Guidelines To Settle All Liens On Title

Knowing is half the battle, right in line with persistence, dedication, communication, and follow through.

For an expert opinion, help, or if you just need to be pointed in the right direction on a tough short sale case, fill out the form below for immediate assistance.

BSI Financial Short Sale

July 12, 2016 Blogs No Comments

BSI Financial Short Sale Help

British Standards Institution (BSI) Financial Services is a loan servicer and subservicer. Homeowners who have their mortgage account with BSI with an underwater asset will need to work with them to accomplish a short sale, loan modification, deed-in-lieu or other bank work out option. BSI participates in HAFA and we have been able to obtain homeowners $10,000 in relocation incentive if eligible and have the deficiency judgment waived. Just like any servicer, challenges can occur when working with BSI. Some common challenges in this industry are lack in communication, misplacement of documentation, and misinformation.

BSI Financial Short Sale help is not easy to come by as many people are not well versed in dealing with lenders in sensitive situations. Supporting distressed homeowners and assets should not be taken lightly so it’s important to have as much information and resources available to achieve desired results.

Questions on anything short sale or bank related? If so, please fill out the form below and you will be contacted shortly by a specialist.

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