| Short sale refers to property being sold for less than | | | | own? |
| is owed on the mortgage note. When borrowers are | | | | Deficiency judgments wreak havoc on your credit |
| unable to become current on their loan or afford | | | | report and can haunt you for years. If you are able |
| future mortgage payments, some banks will allow | | | | to obtain credit, this black mark will place you in the |
| them to sell their house to pay off the loan. | | | | "high-risk" category and creditors will charge higher |
| Short sale real estate transactions are handled | | | | interest rates and provide lower credit limits. Higher |
| through the lender's loss mitigation division. A loss | | | | interest rates alone can amount to several thousand |
| mitigator is assigned to work with the borrower | | | | dollars over time. |
| throughout the process. Loss mitigators do not | | | | With Payment in Full without Pursuit of Deficiency |
| approve or disapprove short sale requests. Instead, | | | | Judgment, lenders agree to accept the sale price as |
| they act as a mediator between the homeowner and | | | | payment in full toward the mortgage note. Once the |
| bank and assist in developing a workable plan. | | | | property is sold, you hand over the keys to the new |
| Lenders are not required to offer short sales. Those | | | | owner and walk away without owing any additional |
| that do follow protocol established through their | | | | monies. Obviously, this is the best course of action. |
| corporate headquarters. At present, there is no | | | | Most banks require borrowers to have a buyer in |
| uniform short sale strategy. The only way to know if | | | | place before they grant short sale approval. Others |
| your bank enters into short sales is to contact them | | | | will grant borrowers a few months time to list their |
| and discuss their policies and procedures. | | | | property through a realtor. It can be challenging to |
| Once properties enter foreclosure they are no longer | | | | find a realtor willing to list short sale property. Short |
| eligible for short sale approval. If you are 31 days | | | | sales require considerably more work and usually |
| delinquent on your note, it is imperative to contact | | | | result in a lower commission. Few people want to |
| your lender immediately. If the bank commences with | | | | work harder for less money. |
| foreclosure proceedings, you will blow your | | | | One under-utilized source for locating buyers is real |
| opportunity for being able to walk away from your | | | | estate investors. Today, investors are attracted to |
| house without owing a dime. | | | | short sale properties because they are sold below |
| Two types of short sales exist: Deficiency Judgment | | | | market value and usually provide a good return on |
| and Payment in Full without Pursuit of Deficiency | | | | investment. |
| Judgment. The first should be avoided at all costs. | | | | Another bonus of selling to investors is that many |
| The way short sales work is the borrower sells the | | | | purchase houses with cash. This is of particular |
| home below market value in order to attract a buyer. | | | | importance when attempting to gain short sale |
| Let's say you owe $170,000 on your loan and sell | | | | approval. Banks are generally more willing to negotiate |
| your house for $145,000. This results in a $25,000 | | | | with buyers who have cash in hand. |
| deficiency. | | | | There are many elements involved with short sale |
| If you aren't able to pay the deficiency in full, your | | | | homes. Take time to become educated about the |
| lender issues a Deficiency Judgment which remains on | | | | process and discuss available options with your lender. |
| your credit report until it is paid. How long would it | | | | If necessary, consult with a real estate attorney or |
| take you to repay $25,000? And, how much would it | | | | short sale specialist for advice and guidance. |
| stink to continue paying on a home you no longer | | | | |