When you are late making mortgage payments because you are having financial trouble, the first thing that happens is the lender will send you a letter asking you to make your payment. Generally, it is ignored because you can't pay it. When letters don't work, the lender then will begin calling you to make the payment. Of course, you try and avoid these calls because you still can't pay up. After you are 60 days late, you have likely gotten a number of letters and calls, and maybe even a collection agency's nasty letter or call. When you are 90 to 120 days late, the lender will file a Loss Mitigation to start the foreclosure procedure. Between 120 and 180 days late, the lender may get an attorney involved and a legal letter is sent. After 180 days the home can be sold at auction and you loose your home, your credit and your dignity. This time frame can change depending on who the lender is and their own procedures, but, in a perfect world, this is the basic process.
Today, lenders are having thousands of people default on their mortgage so the process could take far longer. If you are one of them, you need to hire an expert Realtor and get your property sold immediately. Ah, but you owe too much to sell? You don't have cash to bring to the closing table? You certainly can't pay a comission. Then hire an expert Realtor in "short sale". This is a process where the Realtor negotiates with the lender to take less than what is owed and they pay all the Realtor's fees. Why would they do that? Because no bank wants to foreclose a loan. Not only does it cost them more money in the long run in attorney fees and court costs, but it looks bad to their investors to have houses in inventory. Remember, a lender is in the business of lending money, not Real Estate. They then have to pay Realtor fees and upkeep on the property until it sells. It is in their best interest to allow a short sale. They will pay all Realtor fees and some closing costs and take a lower price just to get SOME of their money back rather than taking the property back.
But, what's in it for you? If you qualify, you are off the hook for the loan and any back payments you may owe. They will even pay the back taxes and HOA fees if you have them. You can then go on with your life with a "negotiated closed loan" on your credit rather than a "court ordered foreclosure" and you won't get a deficiency judgement following you around the next time you want to buy something on credit. Your credit score is also used to determine your eligibility to rent certain properties. It is even used by insurance companies in charging insurance rates. A deficincy judgement can be filed against you up to 10 years after the fact! What is a deficiency judgement? That is the difference between what you owe including all the bank's fees and costs etc and what the house actually sold for, it could amount to tens of thousands of dollars. In "short sale" you owe NOTHING!
In the Panhandle of Florida, Pat Perrotta is the expert in short sales, the one you should call, or visit hwe website at www.soldbypat.net. She can even help you if you live somewhere else by referring you the the expert in your area. Call her at 850-830-5541 even if you just want to discuss your options.
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