Short Sales – One of The Best Options To Avoid Foreclosure

What is a short sale?
It is a process through which the lender agrees to settle for less than what you owe on the property, relieving the homeowner of the debt.

Why would your lender allow a short sale?
A short sale represents a better return on investment to your lender than a foreclosure. The lender realizes savings from this process and lets them get paid on the loan about 6 months earlier than in a foreclosure. Lenders also don’t need to spend on attorneys to complete the foreclosure process. In other words, lenders save time and money.

How does a short sale show up on your credit, compared to a foreclosure?
A foreclosure stays on your record for 7 years and is a required disclosure on most credit and job applications. It results in a loss of around 300 points on your credit report. A short sale, on the other hand,  may cause a loss of around 75-125 FICO points, which is far less negative. It is listed as Settled Debt. In many cases you may be able to apply for a new home loan in about a year and half.

What documentation is required?
A package list may consist of the following:
1. A Proposal Letter
2. Purchase Sales Agreement
3. Settlement Statement
4. Authorization to Release Information
5. Hardship Letter
6. Financial Statement
7. Owner Financial History or Full Disclosure of Current Financial Situation
8. Payroll Stubs
9. Last 2 Years Tax Returns
10. Last 2 Bank Statements
11. Last 6 Months of Profit and Loss Statement (if self-employed)
12. An Estimated Net Sheet / HUD-1

Do not be overwhelmed by the paperwork involved. A short sale specialist will guide you and assist you in the preparation of these.

How does the process work?
1. Contact the specialist for a free, confidential, non-obligation consultation. An evaluation will be performed to find out if conditions exist for any of the foreclosure options.
2. The required documents are prepared and delivered to the lender.
3. The specialist markets the property to obtain the best possible offers.
4. The specialist negotiates the terms of the short sale with the lender, from the sale price to the closing costs.
5. After the lender grants approval, the sale goes through.
Why do you need a Short Sale Specialist?

A specialist will give you a much better chance of successfully going through this process. There are many different  entities involved  in a mortgage. A specialist will know how to deal with the first and second lenders, the investor on the loan, the buyer, the agents, etc.

A specialist has experience, negotiation skills, a knowledge of the lenders’ systems and requirements, financial know-how, information on current laws and regulations, capability to oversee the documentation preparation and excellent customer service.