What is a "distressed homeowner"?

• Are you a property owner that, for a multitude of reasons, is unhappy with or inundated by their current housing situation. Reasons for this distress vary greatly by homeowner but may include:
• Are you behind in your payments?
• Is your property worth less than your mortgage?
• Being behind on your mortgage payments and facing foreclosure
• Being behind on your property or income taxes
• A change in your personal life and/or financial situation; job loss, divorce, illness
• The need for costly property repairs
• Failed attempts at debt refinancing
• Possibly bankruptcy
• The inability to sell your home on the open market within a given timeframe
• Victim of Predatory lending
  

Whatever your case might be, consultants of The Short Sale Firm are confident that we are able to provide you with a variety of solutions that best fit your needs. Our ultimate goal is to assist you in regaining your peace of mind by formulating an effective plan to remedy your situation. Time is of the essence! If you would like honest and sound advice from licensed real estate professionals then please contact us immediately to arrange a meeting.

Short Sales

What is a short sale?

A short sale is an opportunity for financially distressed homeowners who have encountered hardships. In a short sale, an overwhelmed homeowner sells his home for less than the value of his loan (or the net proceeds from the sale are less than what is actually owed). The lender accepts the sale as payment in full (or "paid as agreed") for the loan. The difference between the accepted sales amount and the loan balance is called a deficiency. The following example illustrates a short sale:

John, who is a couple of months behind on his mortgage payments, has his home listed for sale. John receives an offer to purchase his property for $175,000 however his current mortgage balance is $200,000. Clearly, there is a difference of $25,000 between what has been offered and what is owed to the lender. A short sale, or "short pay", must be negotiated. The bank must accept $175,000 as payment in full for what is owed otherwise the sale cannot occur (as John, already months behind on his mortgage, cannot afford to come out of pocket for the difference). The Short Sale Firm specializes in handling cases just like John's.

Who qualifies for a Short Sale?

The decline in market value of a property below the total debt owed on that property does not automatically qualify a homeowner for a short sale. Banks take several factors into consideration when determining if it will allow for a short sale to occur.

First and foremost, the homeowner must have experienced some sort of hardship that has caused them to no longer be able to afford their mortgage payments. Hardships include but are not limited to loss of job, divorce, death in family, significant decrease in income, medical issues, inability to pay higher adjusted interest rate on the mortgage, bankruptcy, and other unforeseen circumstances that cause financial burden. The bank will request that the homeowner write a detailed hardship letter explaining their situation. Next, the bank will analyze the homeowner's current financial situation by requesting items such as bank statements, pay stubs, tax returns, and/or other relevant financial detail. The reason for this is twofold - first, the bank wants to corroborate that what is stated in the hardship letter ties to the homeowner's financial data, and next the bank wants to be assured that the homeowner does not have significant cash reserves that could be utilized to make future mortgage payments.