I just completed a short sale in Loudoun County with Bank of America and it was a breeze. My short sale negotiator was a huge asset in getting this short sales completed quickly. Bank of America has really improved their process and we had approval for the sale in just 6 weeks. The seller was relocated for work and downsized from their job here in Loudoun County. They had already relocated for work and their home had some of their things in it but was not regularly lived in. The seller was forgiven for the debt 100% and the approval letter stated so. They were not required go late paying their mortgage, however, the seller did stop paying for 2 months because they had to pay their rent in their new location and could not afford both. The bank did not require any promisory note from the seller. (A promissory note is a promise to pay a sum of money at no interest for a set amount monthy until a certain sum is paid off). In this case and in most cases a promisorry note is negotiable. A good negotiator can get these greatly reduced or eliminated. Of course is also depends on the investor who owns the loan and the bank who holds your mortgage.
When can this seller buy again? In most cases as long and this seller's credit was high to begin with they will be able to buy a home again in just 2 years. The key was if they had otherwise maintained good credit. Of course any late payments on their mortage counted against their credit score. If the bank investor who owned their loan allowed them to stay current paying their mortage, and they did, while they considered their short sale it would have been best to stay current. They should NEVER have stopped paying their mortage if they could keep current and the investor who owned their loan allowed them to do a short sale while staying current on heir payments. The recording of the settled debt on this Loudoun County short sale will likely only reduce their credit by 100-150 points off their credit score. This is for being late a few months and for the short sale recordation. If their credit was 750 to begin with it may go to 600 -650. However, it will climb up fast again with good payment history in the future and with the now significantly reduced debt. Remember they no longer having mortgage debt.
Short sales are now being considered for sellers who are living month to month and barely able to keep up, for those that need to relocated for work, and for all types of hardships such as illness, job loss and divorce.
Can banks force your to use your 401K to sell your home short? Sellers are NOT required by the mortage lender to pull money from their 401K to go towards a short sale and banks cannot require you to pull from a 401k. However, should a seller have a huge 401k ($300K for eg.) the bank can request them to cash in some to approve the short sale although they cannot force them to do so. They will not approve the short sale unless their terms are met. Should the seller not like the terms the bank decides on they are not obligated to proceed with the short sale and can them proceed with another option. Each seller must decide for themself whether they want to do a short sale. Agents should NEVER ever talk clients into doing a short sale. There is no exact guidline for short sales and each bank and each sellers circumstances are different. If you need more information to make an informed decision call me for a no obligation consultation. I will let you know whether you could do a short sale on your Loudoun County home. My short sale negotiator can answer any questions as well. Neither of us will EVER attempt to talk you into a short sale.
Short sales services are FREE to the home seller and there is NEVER any charge and never any obligation on your part to go through with a short sale. Get educated on the process before you decide what to do. NEVER let your home go to FORECLOSURE without investigating your options. You will be sorry. We can explain a loan modification, deed in Lieu is, cash for keys, stategic default, bankruptcy, foreclosure and all the various options. What they are, how you go through with them and what options you may have. Never pay ANYONE up front fees for any of these services. Get informed! Call Diana Geremia at 703-587-5403 for friendly trustworthy advice. She is an informed local real estate agent and is with Long and Foster Leesburg. Also you may see LEESBURGVASHORTSALE.com for more information.