Short sale approval is not AUTOMATIC!

The last number I hear for Subprime loans that are in foreclosure:  161,540 for US. 

 There is nothing AUTOMATIC about short sales - the can STICK you and the STANDARDS can  different with each lender!

Let me tell you a couple of things about short sales/foreclosures

1.  You decide you're going to sell your home at a loss by asking for a short sale.  Although no one has writen a concreted book of rules that apply to short sale, there are rules that must be met in order to even qualify for a short sale.  You need to know these rules of thumb, best way to find out what is expected is to get a real estate agent to help you get this information.

Typically, lenders won't even consider a short sale if your payments are current.  This is told to you not for you to just get your property get in default in order to qualify, but just to let you know what lender look for. Lenders will be more agreeable to negotiation if your payment are in arrears. 

Beware: If you have cash assets, the lender might try to tap those accounts.  Doing a short sale is not the faint of heart! And don't think about leaving information out on your financial disclosure to the lender.  If you decided to do this, please do not call the Mother and Daughter Realty Team!!!!

Short sale can be a pain, however, it is a better option than Foreclosure or Deed in lieu of Foreclosure but they also have some affects on your credit.  Seller will take a bigger hit on their credit report by going through foreclosure or giving the lender a deed-in-lieu of foreclosure (if the lender will accept the in lieu of) than with a short sale.  The points lost in a FICO score are close to:

Foreclosure or Deed-in-lieu of Foreclosure:  Both of these soltuions affect credit the same.  Seller will take a hit of 250 to 290 points.  This means if a seller's FICO score before foreclosure was 680; it could dip as low as 400.

Short Sale: The affect of a short sale on a seller's credit report is much less damaging.  The ding on credit will show up as a pre-foreclosure in redemption status. Short sale will result in a loss of 80 to 100 points.  This means a short sale with a previous FICO of 680 will see it fall to 580 to 600.

2.  Definition of Short Sale: Short sales happen when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of sale.  Not all lenders will negotiatie a short sale, and that is why a real estate agent can be tremendous help by contacting the lender's loss mitigation department to find out.

In California the Governor is working on ways to help owners keep their home.  Please check out these options first before you decide to run.  There may be some way to help save your home.

Just wanted to throw this information out there for those that have the wrong idea about short sales. Some think it is Automatic - you say you want to do a short sale and it is automatically accepted (no true). There is a big chance it will be denied or counter right back up to the amount owed.

I believe that every owner should get as much information as they can on Late mortgage payments, Notice of Defaults, Pre-foreclosure and Foreclosure, deficency judgements, Trustee Sale Dates and Auctions - and what happens to you and how soon.  You should stay in touch with your lenders and you should definitely seek professional help if you are in either of these situations.

the Mother and Daughter Realty Team @ Perfect Financial Solutions 866-750-8282