Sale is the sale of a home when sales proceeds do not fully pay off the
existing loan(s) and lender(s) accepts a discounted payoff to fully satisfy the
part, the existing lender pays virtually all sales costs, including
commissions, escrow and title fees and repair costs. You get your home sold,
the loan(s) paid off and you avoid foreclosure.
Is a Short Sale right for me?
lenders are increasingly willing to work with borrowers faced with a financial
hardship to accept a discounted payoff on a mortgage. If you are faced with a
hardship that makes it likely you will be unable to meet your obligation on
your mortgage, your lender would prefer to settle the matter with you as
opposed to taking the property through foreclosure.
consider the option of pursuing a Short Sale, remember your lender is looking
to limit any potential loss on your loan. By completing a Short Sale, your
lender has arrived at a solution that is, for them, much better than a
line, your lender wants to work with you.
If I do a Short Sale, how much will
I have to pay to sell my home?
It’s true, in most cases you will pay literally no sales costs if your lender
approves the Short Sale. All commissions, title and escrow fees, and even most
repair expenses are paid by the lender as part of the Short Sale approval. We
will include the *following clause in the contract.
agreement to sell is subject to approval by existing lender of a Short Sale at
no cost to Seller. Seller shall not be required to deposit funds to close
lenders approve Short Sales and accept the resulting loss in an effort to avoid
bigger losses through foreclosure.
How do I get started on a
no charge to you to get started. It is as simple as contacting us and we will
get to work. If you later decide you don't want to do a short sale, that is
Can I simply deed my
property to someone else and avoid the hassle?
your property to someone without paying off the loan is nearly always a bad
idea. In the first place, the lender still considers you primarily responsible
for payment on the loan. If loan payments do not get paid, or if the lender
ultimately forecloses, this will show on your credit.
when you deed your property to someone else, you give up control of the
property. Along with the deed goes the ability to control the property.
What sort of hardship would my
lender consider legitimate?
extent, that will depend upon the mortgage company considering the Short Sale
request. Generally, so long as the hardship is real and the mortgage company
believes the loan is likely to become delinquent as a result, the Short Sale
request will be processed by the Loss Mitigation Department. A big key to
getting Loss Mitigation to accept a hardship is to submit a strong hardship
letter. The hardship letter sets the tone for the entire file.
will find a list of “hardships” that are common and frequently accepted by
¨Family illness or injury
¨Illness or injury in the extended family –
particularly if it forces relocation
¨Job relocation when the property is equity
¨Job loss or significant income loss
¨Divorce or split of domestic partners
¨Adjustment in mortgage payment or unforeseen
increase in living expenses
I am current on my mortgage, will my lender consider a Short Sale ?
answer is, maybe. Some lenders will accept a Short Sale file for approval on
loans that are not delinquent. Other lenders will not accept the file until the
loan is delinquent. We can put your Short Sale file together within a couple
days and submit it for approval. (Remember, there is no charge for this). That
is the best way to determine if your lender will accept a file for approval on
a loan that is current.
Why would a mortgage company agree
to accept a Short Sale?
actually several reasons why a mortgage company would approve a Short Sale
payoff, including the following;
¨Legal Concerns – Mortgage lenders have come under
legal pressure to work with borrowers to equitably resolve situations where
borrowers are unable to meet their mortgage obligation, particularly when the
borrower makes an effort to arrive at a compromise solution.
¨Wall Street is Watching – Mortgage lenders rely
heavily on their ability to package and sell bundles of loans on the secondary
mortgage market. They need to sell these bundles of loans in order to put the
funds back to work by loaning the money again and collect loan fees along the
way. If mortgages perform poorly after they are sold it could impact the
lender's ability to sell their loans on the secondary market. A successful
Short Sale gets the loan payoff resolved quickly.
¨Asset Management Expenses- If a lender acquires a
property through foreclosure, the property will be managed until it is repaired
and resold. It is expensive to manage real property assets - homes – spread
throughout the region, the state and possibly even the nation. Keeping
properties maintained, keeping utilities on, making repairs and the
administrative costs attached to these activities are all costs the lender
would prefer to avoid. A successful Short Sale eliminates most of these costs
¨Reserve Requirement- Delinquent and non-performing
loans place another burden on mortgage lenders. For all delinquent and
non-performing loans lenders must set aside funds in reserve to deal with
potential losses. These funds cannot be put to work generating new loan fees
until the bad loans are resolved. A successful Short Sale lets the lender put
more money to work.
Do lenders approve all Short
is why it is critical to work with someone that has extensive experience at
getting Short Sales approved.
presentation of the Short Sale package to the lender to working with the
lenders Loss Mitigations Department, I know how to keep the file moving towards
I have two loans, can I still
do a Short Sale?
can work with both lenders (many times the same lender hold the 1st and the 2nd
loans) to put together a Short Sale transaction. Even if the value of your home
is below the balance of the 1st mortgage, we can normally get the two lenders
end, neither lender wants to own another home through foreclosure.
My property is in rough shape
and needs work, can I still do a Short Sale?
In fact, lenders are more motivated to do a Short Sale on a property that needs
work than on a property that doesn’t. The lender knows the risk of loss goes up
when they foreclose on a property that needs lots of work.
from expense of completing the work, lenders are simply not set up to get the
work done. They are in the loan business, not the fix- it business.
I am concerned about my credit,
how will a Short Sale affect my credit?
key here is to avoid foreclosure. By nearly any measure, a foreclosure is the
most damaging event your credit status can encounter - worse than bankruptcy.
In the course of getting your short sale approved you may miss your mortgage
payments, and these will show on your credit.
avoiding foreclosure, you will likely be able to resume normal borrowing (car
loans, credit cards, consumer goods and such) relatively quickly
My income problem was
temporary. Do I need to sell my home?
be able to keep your home. You need to convince your mortgage company of two
¨The problem that caused the mortgage payment
disruption was beyond your control – illness, injury, temporary disability or
forced job change are a few examples
¨You are now solidly in a position to stay current on
your mortgage payments and make some progress towards making up the delinquent
What is a Forbearance
Forbearance Agreement is a written agreement with your mortgage company in
which you arrange to keep your home. The agreement will normally include two
¨The borrower’s promise to remain current on the
mortgage going forward
¨Some plan for making up the delinquent interest and
other charges. It may mean making additional payments to the mortgage company
or the delinquent amount could be added to the loan to be paid later.