You're facing foreclosure- is a short sale the answer?
For those that know me personally, you know that I am always looking for ways to assist my clients. I am continually learning about the changes in 'our' market and use that knowledge to best serve my client base. As this market is changing every day, we are seeing a lot of families losing their homes for a number of different reasons and hardships.
If you or anyone you know is having problems with a property in my area, give me a call. I am a Certified Distressed Property Expert (CDPE), Graduate of Realtor Institute (GRI), Accredited Buyers Representative (ABR), New Home Sales (NHS) and am working with a great team expanding our business plan to assist clients in making Pre-foreclosure decisions. All transactions are kept CONFIDENTIAL.
Many homeowners are finding that their home's current market value is less than they paid for it. Even more tragically, the value of their home is less than the loan payoff. They always heard that home values will go up over time, they thought they were building equity in their home... thus saving for retirement or for a down payment to move up to a larger home in a few years.
If possible, home owners should stay in their home, keep their mortgage current and ride out the "mortgage crisis". Most specialists are predicting that the real estate market will turn around in time. However, some home owners find them selves in situations that cause them to fall behind in their mortgage payment... they either loose their job, have a serious illness or death in the family, have a divorce, are transferred to another location with their job, or experience some other tragic situation in their life.
Once a home owner falls behind in their mortgage payments, their lender will start to call them... sometimes incessantly. When this happens many homeowners stop communicating with their lender, which is the wrong way to handle this matter and avoid foreclosure. If the home owner wants to stay in their home, they should contact their lender as soon as they know there is a problem (even before they miss a payment if possible). Lenders don't want more foreclosures, they want home owners to stay in their homes and make their mortgage payments. Therefore, they will work with home owners to find a solution that will benefit everyone involved.
Here are a few of the options that may be offered by your lender, to avoid foreclosure:
A revised repayment plan - Forbearance - Loan modification - Short Sale - Short Refinance
In the case of a Short Sale, the lender may allow you to sell your home for less than the outstanding loan amount, take the proceeds and forgive you of any remaining debt.
Currently, if you are an owner occupant of a property, the tax code allows you to avoid paying taxes on the shortfall (a 1099 was previously sent in the amount of the shortfall and the owner was responsible for paying income tax on that amount)... this can be a huge savings for owner occupants who decide to sell their home as a short sale.
The short sale option should have a much lower negative effect on the home owner's credit, so short sales are becoming the best course of action for many home owners who have fallen behind on their mortgage payments.
Home owners in this situation should contact an experienced short sale Realtor to list and market their home, communicate and negotiate with the bank on their behalf, and handle the entire sale and short sale process for them.
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