Short Sale Information
SHORT SALES…GOOD THINGS COME IN STIMULUS PACKAGES!
Let’s take an otherwise difficult situation and spin it in a positive light. Settling a debt for less than what you owe and being able to get back on your feet is a gift. And if you qualify…. it could be the blessing you are looking for!
WHAT IS A SHORT SALE?
When your loan balance is higher than the value of your home, you can ask the bank to take less than what is owed to them.
WHAT ABOUT A LOAN MODIFICATION?
Contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a lower rate, a different payment plan, etc. When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option.
DO I QUALIFY?
The following is a general list, but by no means exhaustive.
Your loan has adjusted or is adjusting and you cannot afford the new payment.
Divorce
Death in family
Military deployment
Illness
Relocation
Loss of a job
Incarceration (yes, incarceration)
WHAT DO YOU DO NOW?
CALL US AND MAKE AN APPOINTMENT! . With all of the terms being tossed around, ie. HAFA, HAMP, “Making Home Affordable”, Fannie Mae, Freddie Mac, loan servicer, NOD……you get the idea, it is difficult to understand the terms, the process, and the guidelines. Let us be your translator and help you. Let’s find out if this is the best option for you.
WHAT DOES THE LENDER NEED FROM YOU?
Here is what you will need to get started. Depending on the lender, more documents could be required:
1. AUTHORIZATION AND RELEASE FORMS-- One page letter, sent to the lender, signed by you that gives us your short sale negotiator permission to speak with the lender on your behalf and get the short sale process started (see PDF attachment form on our website by clicking the link at the bottom of this page).
2. HARDSHIP LETTER-- A letter detailing your financial situation and why you need the short sale (We can provide a PDF file with “Hardship Letter Guidelines”to aid you in writing your letter).
3. PROOF OF INCOME AND ASSETS--A simple worksheet that details, line by line, your income and expenses for each month as well as proof of your assets (We will provide a template for these).
4. COPIES OF MORTGAGE STATEMENTS FROM ALL LIENHOLDERS (ie. Your 1st and 2nd).
5. COPIES OF LAST TWO MONTHS PAYCHECKS (If unemployed, a letter of explanation).
6. COPIES OF LAST TWO MONTHS BANK STATEMENTS (If no accounts, provide a letter of explanation).
HOW DO YOU PREPARE FOR A SHORT SALE?
BE DILIGENT AND PATIENT! Even if you're well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Guidelines are in place to help expedite but your patience, perseverance, and cooperation are key to a successful short sale.
AND FINALLY…. AFTER ALL THE WORK AND WAITING, WHAT ARE THE BENEFITS TO A SHORT SALE?
Short sale will typically impact your credit score less than foreclosure and bankruptcy. And…who wants the dreaded “foreclosure” on their credit? You will be able to purchase another home sooner than if you foreclose.
Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Consult your accountant. Short sales are not as “awful” as they were 2+ years ago. Strides in efficiency and guidelines have been made to help homeowners. We’re not saying they are easy…but it just might be what you need to get back on your feet.
Best Regards,
Major League Properties, Inc.
*You
are advised to seek the advice of your accountant or attorney regarding your
legal, financial, credit and tax related issues in regards to the disposition
of your
property.
