This is Part 2 of our short sale series, "Short Sales In Branford Connecticut and New Haven County - Do You Qualify?  In our first article of this series Short Sales In Branford Connecticut and New Haven County - An Alternative to Foreclosure - Part 1 we learned what a short sale is.

If you own a home in Branford Connecticut and New Haven County, are behind on your mortgage payments or have found out that you owe more money to your lender than what a buyer is willing to pay for your home does not automatically mean you will be able to just sell your home for less than what is owed to your lender.

To qualify as a short sale, you must pass the Hardship Test and show just and provable reasons why you cannot keep your home any longer.

The Hardship Test - As you go through each of these questions examine your current situation to see if it will pass the hardship test.

• Did you lose your job since you bought the home?
• Haven you had an illness, injury or bad accident and could not work?
• Have you incurred new large medical bills since you bought the home?
• Have you been relocated to another city or state?
• Did your interest rates increase so much that it is now a hardship for you to pay your mortgage?

Now each situation is different.  Each short sale request is looked at individually.  Bottom line is you must be able to prove there is a hardship.

What is NOT a Hardship?

If you took all of the equity out of your home and are now in debt you are going to have a very tough time having that accepted as a hardship.  I would recommend doing whatever you can to keep your home.

If you bought your home at the height of the market and it is now worth less than what you paid for it that is not a hardship or reason to sell your home as a short sale in Branford Connecticut and New Haven County.

The Asset Test - Are there assets that you can liquidate to bring to closing when you sell your home short of what is owed to your lender?

• Do you have stocks and bonds?

 

• Do you have money in CD's and savings accounts?

 

• Do you have equity in other properties?

Your lender is not going to take all of the loss if you have any of these types of assets and not have you bring some money to the table at closing.  Your lender will only accept the short sale if you contribute to the loss as well.  You may however be able to negotiate the loss with your lender.

The Fraud Test - Did you commit fraud on your loan application for this property?  If you were not truthful and lied about anything on your loan applications like:

 

• Where you worked?

 

• What your assets were?

 

• How much money you were making?

Lenders have access to your original loan application and any untruths or lies are going to be checked out by the lender.  They will be matching up what you are saying now to what was said on your original application when you applied for the loan.  If there are any big differences then you better have a very good explanation of why the change.  An obvious reason would be a job loss.

If you committed fraud, I will not list your home as a Short Sale in Branford Connecticut and New Haven County because you will be required to turn in a short sale package to your lender which we will help you put together along with an offer thereby exposing you to fraud and that can have serious legal implications to you.

The next article in this series of Short Sales in Branford Connecticut and New Haven County will cover the documents that are required in the short sale package. 

Disclaimer: This post is not intended to be or to provide legal advice. We recommend that you speak to your attorney and your tax accountant regarding specifics and to find out if this is the best option for you in your situation.

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Contact Donna Bigda, ABR, SRES, e-PRO, Realtor®, RE/MAX Alliance Licensed Realtor® in the State of Connecticut at 203-488-1641, ext. 214 to list your property for sale or to purchase a property in Branford, Guilford, Madison, East Haven, New Haven and the rest of shoreline area in New Haven County Connecticut.

If you're thinking about buying a home in Branford CT there are plenty of great buys in today's market and now is one of the best times to buy while interest rates remain low. For more information on Branford CT real estate homes or condos, see Branford CT real estate or sign up today to get access the hottest new listings here Branford CT homes and condos. 

To keep up to date on the current state of the Branford CT Real Estate Market & other information about Branford CT, subscribe to my blog via email here or visit online at www.connecticutshorelineblog.com.

If email is your communication preference, email me at donna@donnabigda.com.

Disclaimer:  All information provided by this author is strictly an opinion, is not guaranteed, may be based on information collected from several sources, which may or may not be deemed reliable at the time of researching this article and may be time sensitive.

Copyright © 2008 by Donna Bigda, All Rights Reserved ...*Short Sales in Branford Connecticut and New Haven County - Do You Qualify? - Part 2*