Double trouble: Foreclosure process doesn’t stop during short sales
Seller OK? Check.

Read more on Reno Gazette-Journal

A short sale home involves property that is in the process of being foreclosed. Although the bank has not yet seized the house, borrowers have little time before losing their property. Lenders will occasionally allow the homeowner to sell their home for less than they owe on their mortgage note through the process of a short sale.

Purchasing a short sale home is basically the same as buying any real estate for sale. The sale of these properties is generally facilitated by a realtor. The homeowner is required to work with an assigned bank loss mitigator.

An employee of the bank, loss mitigators act as a mediator between the seller, buyer and lender. They also assist the borrower throughout the short sale process and provide guidelines which must be strictly adhered to.

Each mortgage lender institutes protocol for establishing short sale approval. Many lenders will accept the purchase price as payment in full toward the delinquent mortgage note. Other lenders require the borrower to repay the difference between the purchase price and loan balance.

If the borrower is unable to pay the difference at the time of the sale, the bank will issue a Deficiency Judgment. These judgments wreak havoc on the borrower’s credit history. This black mark prohibits borrowers from obtaining another mortgage for years to come. The judgment remains in place until paid in full.

Borrowers should give careful consideration to the long term affects when lenders issue deficiency judgments. Depending on the amount owed, it might be a smarter financial decision to allow the home to fall into foreclosure.

When foreclosure is looming, borrowers should request a Deed in Lieu of Foreclosure. This allows borrowers to return the house to the lender and walk away from the property without owing additional money. The homeowner will lose all monies vested in the home and cannot receive sale proceeds if the property sells for more than is owed on the loan.

Borrowers must obtain short sale approval from their lender before they can sell their house for less than is owed. Since the bank is accepting a financial loss on the property, borrowers will be subjected to financial scrutiny. Banks require borrowers to submit a short sale packet and provide substantial financial documentation.

Banks accept approximately 10-percent of short sale requests. Homeowners can improve their chance of obtaining approval by working with a short sale specialist. Some realtors have received training in the short sale process. A few real estate investors have been trained in this niche as well.

Borrowers who need to sell their home to satisfy a short sale agreement should consider locating private real estate investors. Many investors purchase homes with cash to obtain additional negotiation power and quickly close the deal.

Locate real estate investors by conducting research online. Attend local real estate investment networking meetings. Check the Classifieds section in newspapers and real estate publications. Ask friends, family or co-workers for referrals.

Many homeowners want to know how to short sale and prevent foreclosure. This option is usually the last opportunity to sell their property. Short selling requires lender approval to sell the property for less than is owed on the mortgage note.

Outlining every detail of how to short sale would require a book. This article outlines the basics and will help readers understand how short sales work and what is involved. Since every lender handles this type of transaction according to their established protocol, there is no one-size-fits-all strategy. However, most lenders require similar information and utilize similar strategies.

Short sales are involved and every detail of the borrower’s finances will be scrutinized. Lenders require borrowers to submit a short sale packet which includes financial records, tax returns, income and expenses, credit card and bank statements, list of assets and various other documents.

Banks can initiate foreclosure proceedings once borrowers become 15 days delinquent on their loan. Most banks extend a longer grace period, but as credit becomes tighter, banks become less tolerant.

Delinquent accounts are handled by the bank’s loss mitigation department. Borrowers who have fallen behind in payments will be assigned to a loss mitigator who will work with them throughout the process.

The primary role of loss mitigators is to work with borrowers and banks to develop a repayment plan and cure mortgage arrearages. This is usually obtained by modifying the loan. Loan modifications are a good option for borrowers who are financially capable of making future payments.

If borrowers cannot qualify for a loan modification, the next available option is to short sale. Most lenders require borrowers to have a sales contract before granting short sale approval. Some will allow borrowers to list their property through a real estate agent. A buyer must be located within a few months or the bank commences with foreclosure.

One little known technique for locating buyers is to seek out real estate investors. Many investors are attracted to short sale properties because they are sold below market value and make good investment properties.

It is common practice amongst investors to purchase homes with cash in order to expedite the deal. This is the perfect scenario for obtaining short sale approval. Lenders do not have to wait for buyers to obtain financing. Sellers don’t have to worry about the deal falling through and investors purchase the property at discount.

One important element of short sales is to determine which type is offered by the lender. Some lenders accept the sale price as payment in full. The borrower is released from the loan and can walk away from their property without owing additional money. This is referred to as Payment in Full without Pursuit of Deficiency Judgment.

Other lenders hold borrowers responsible for repayment of deficiency between the sale price and loan balance. When borrowers are unable to pay the deficiency in full, banks issue a judgment which remains on credit reports until fully satisfied.

It is crucial to openly discuss all options with your assigned loss mitigator. If necessary, consult with a real estate lawyer or short sale specialist. Short sales can be a saving grace or devilish curse which drives you further into debt. Take time to become educated about the process so you don’t end up in worse shape than you already are.

Another bank-owned bargain from Instaclose, San Diego’s #1 REO Brokerage. Chris Sylvada with Instaclose Real Estate is a San Diego native and exclusive buers agent and REO epxert workign the foreclosure market exclusively. You can reach Chris at 760-492-3460 or via email at csylvada@instaclose.com

EXTEND AND PRETEND: The Obama Administration’s Failed Foreclosure Program
President Barack Obama’s signature plan to combat the housing crisis has fallen short of its goals — rather than significantly and permanently reducing home foreclosures, it is only delaying them.

Read more on Huffington Post via Yahoo! News

Five states to get foreclosure prevention aid
As many as 50,000 struggling homeowners in five U.S. states with high unemployment may receive help from a special $600 million federal fund intended to head off foreclosures.

Read more on Reuters via Yahoo! News

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Trilogy Property Solutions, the Legal Short Sale Specialists, interviews Ron Ballard, top short sale attorney on the current state of real estate market to stay on the cutting edge of helping homeowners in foreclosure with doing short sales correctly, legally, and ethically. Its our priority to constantly be aware of new California real estate regulations to make sure that everything we do is moral and abides all foreclosure laws designed to protect homeowners from people who are taking advantage of distressed homeowners. At lunch with Ron Ballard, Esq., and Jeff Watson, Esq. the two top short sales attorneys in the country, we learned even more on how to help home owners legally, correctly, and ethically in this ever changing legal climate on real estate, especially here in California! These times are definitely exposing the greedy from the helpful. Short sales can be done ethically or unethically, and its crucial that homeowners and realtors screen the parties they get involved with carefully. Legal and ethical short sales are done with complete transparency and full disclosure to all parties; the bank, the homeowner, the realtors. This is created through the right documentation and information provided to the right parties at the right time. If someone does not know what theyre doing, they can possibly create enough chaos to lead the property straight to foreclosure. Many realtors are not trained well enough in short sales to prevent a foreclosure, but many homeowners …

In normal sales, usually the buyer pays for it and requests reimbursement from seller in escrow.
But for these short sales, when it’s really all in the bank’s hands, does buyer still pay for short sale or does the bank have their own people do it?
I dont want to pay for this appraisal, then if the house doesn’t appraise and we decide not to get it, I am stuck just wasting a couple hundred buckson that appraisal.

Due to financial hard ships, a mortgagor may have his or her own home foreclosed by the lender. That means losing the home, and a certain sum of money. When a mortgagor fails to keep up with the mortgage payments, he starts to owe the lender more and more money. And as the interest compounds, the mortgagor soon finds himself in a downward spiral situation. The longer he delays the payments, the more money he owes, and therefore loses. The only way to avoid this scenario, is to seek professional help as soon as possible. There are several options for the mortgagor to choose from in the face of a possible foreclosure. So it is definitely possible to minimize the losses while the damage is still manageable. For sure, it would be a pity if a mortgagor fails to tackle the problem early and loses his home and a huge amount of money just because he is unaware that help is readily available.

It is beyond the scope of a single article to discuss all the possible solutions to solving a foreclosure problem. So let’s focus on the short sale option in this article. First thing first, what exactly is a short sale?

A short sale means both the mortgagor and the lender agrees to sell off the property at a price to offset the outstanding loan balance. The loan balance is usually discounted. The lender, however, in such a circumstance, will have the final sale as whether a sale is approved or not. Once the short sale is complete, the discounted loan is considered settled, and the mortgagor no longer owes the bank any more money, thus saving himself from having to potentially repay a huge amount of interest owed.

You would probably have observed that the goal of the short sale is to minimize loses and prevent further damage being done to the mortgagor’s already suffering financial situation.

For example, a mortgagor may have lost his job during a recession. And because of the recession, he is unable to land himself a new job any time soon. So he finds himself unable to meet the mortgage payments. Now he wants to consider selling away his property, since he cannot keep up with the payments. But he finds that the market value of his house has gone southward, again due to the bad market conditions. He realizes that no matter what he does, he is still losing money. If he doesn’t pay up soon, his home will be foreclosed by the lender. And before his home is foreclosed, he would have owed the lender several months of mortgage payments, on which is accruing interest as long as he doesn’t pay up. So to stop the situation from getting from bad to worse, he may have to consider negotiating a short sale with the lender. This will help sell the house faster, as the mortgagor can now sell it at a lower price to offset the discounted loan amount.

Do consider engaging the help of professionals to help negotiate a short sale, as they may be able to sell the property for a discount. In addition they may be able to assist in finding a new home. Do not go through a foreclosure and ruin your credit get professional short sale help now.