Upside Down on Your Mortgage? The Good News is that you DO have Options....... SHORT SALE!

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Prices have fallen drastically all throughout New Hampshire since 2005. As a result a high percentage of people owe more on the mortgage they can ever get on the sale of their home. In a nut shell, they are UPSIDE DOWN. A short sale allows you to sell your home for less than the mortgage balance. I have taught courses to real estate agents and investors on processing “Short Sales” and have a very high success rate. There are many people who “do short sales”, but few provide the comprehensive short sale package that we do. We use ALL of our experience, knowledge and talent and negotiate the HECK out it with the bank. We have a great track record and will work our best to get as short sale done for you too.

 

Below is some general information about short sales


 

What is a Short Sale?

A short sale is something lenders or your mortgage holder will use to discount your home to help liquidate the mortgage to help avoid foreclosure. With the rise in foreclosures home values are sinking fast and lenders will discount your home loan to avoid the cost of going through foreclosure through the process known as a short sale.

Why will my lender short sale or discount a mortgage?

Lenders realize that once they take a house from the homeowner for non-payments, future buyers for that home will want a bargain deal. Everyone knows that a foreclosure property should be sold for less than other houses that are owned by private sellers, so to avoid holding onto a property for 6-8 months a lender will usually like to deal with a homeowner and their buyer, even if it is below market. Taking a hit early means your lender can put their money to use faster and start earning money again, so short sales are the best option to stop foreclosure.

How do I know if my house qualifies for a short sale?

Answer: If you have a hardship and/or are at least 30 days behind on your mortgage payments, your lender is willing to talk about taking a discount and short sale your house to get a bad loan off their books. Plus you have to be over financed meaning after you pay all of your bills you can’t have any money left over for gas, food and other things that will keep you from making your payments. That is just the basic qualifications. We can discuss your situation in detail.

If my lender accepts less than I owe on my home or short payoff, will I be responsible for the difference?

Sometimes a lender will try to come after a homeowner for the short sale balance that is left over after they accept the discounted payoff. If they do, this is known as a deficiency judgment. As a buyer we will only purchase your home if your lender is willing to waive their rights to come after you for the short balance (unless the deficiency is something that you are willing to pay in return for a HUGE discount). Most of time this is not a problem and they put that wording in their payoff letter they issue your after they agreed to a short sale price.

I received a letter from the banks attorney saying a sale date is set they are going to auction my home, is it too late?

As long as you have at least 2 weeks before the auction date, lenders are willing to work with homeowners and postpone the sale in order to avoid paying high cost to take your home. Although it is best to start communications with your lender early and inform them that you want to work on a short sale so they can send you the paperwork needed to start the process they will usually postpone a foreclosure sale if they receive a complete short sale package in due time. If you decide this is an option for you, we can arrange the paperwork and start the process so we can buy your house fast to stop your foreclosure.

Will a short sale affect my credit?

Yes, your credit report may show that your mortgage has been "paid off, less than full". This will let future creditors know that you didn't keep your obligation to pay off your, but it shows that you made a responsible attempt to get the lender majority of their money and that you had integrity. One thing you must realize the sooner you start the short sale process and sell your home the better. The longer you wait the more delinquent marks you will have on your credit report. So if you wait until 2 weeks before the auction of your house, and its takes another 4 months to work out the short sale, your credit will still be taking a hit showing 30, 60, 90, and 120+. Those types of marks can really hurt your credit. Once the Notice of Default has been issued and a foreclosure sale date has been set then most lenders require you to wait 3 years before you can buy another home. This can be avoided if you save up a 5-10% down payment and find a homeowner to offer you owner financing, otherwise it will take 3 years to buy again if you go through with a short sale.

How much can I get if I short sale my home?

Lenders don't want you to receive any money as a result of them taking a discount from a short sale. This makes sense, since they are the ones taking a loss. Any proceeds that are available they have you sign a waiver saying that you won't get any money at the closing. Now some lenders will agree to pay you $1,000 for moving expenses and money to put down on a new place to live, but most will not allow you to receive any money. I have recently negotiated $5,000 for my seller on as short sale, but that is the exception. Plan on receiving ZERO at closing, with anything more as a bonus.

How long does it take to short sale my house?

A short sale on average takes between 30 to 90 days depending on your lender. Smaller lenders can handle a short sale in a few weeks while the larger lenders need need closer to 3 months to process the paperwork.

Can I buy my house back after the short sale?

NO! Lenders will frown if they agree to a short payoff and the original seller buys the house back and they come after both parties that participated in the short sale if they find out you got your house back.

If you have any more question about short sales you can go to our Contact Us page and submit any questions you have. To get started on your short sale, fill in the form below and someone will contact you very shortly.

Jack Lavoie is a Short Sale Foreclosure Specialist

I have been assisting homeowners with short sales since 1992.  I have taught short sale seminars to investors, homeowners and other local real estate professionals.  I service all of New Hampshire and am located in Bedford, NH.  Whether you have a high priced home in Bedford, a 2nd home in Merideth, an apartment building in Bedford or Nashua or a cottage at Hampton Beach, I can assist you in liquidating your property even if you are UPSIDE DOWN on your mortgage, 

What is a short sale?

A short sale or short payoff occurs when a lender agrees to accept less than the outstanding loan amount to satisfy the seller’s loan. A short sale allows both the lender and the distressed property owner to avoid foreclosure by selling the property at a loss. This saves the lender money in the long run and is a “win-win”.  In most cases the lender want will want you to show “hardship” which is very common in this economy.  Some of the hardship reasons are:

  • Unexpected health issues resulting in difficulty making mortgage payments;
  • Lending rate increases on adjustable rate loans;
  • Divorce;
  • Over-extended borrower with multiple mortgages;
  • Job loss or transfer;
  • No money to fix up house

Short  sale transactions require expertise.  Many companies, brokers and individuals are doing short sales.  Unfortunately, approving short sale transactions is an ART which requires a lot of skill.   Don't just choose anyone to take care of this serious problem. We offer affordable rates,  great results and confidentiality to all.

Short sales are more complicated and time consuming than an average real estate sale, making it important to retain an experienced professional to oversee and negotiate the transaction.

 Lenders prefer short sales because they are not in the business of managing and owning property and short sales are less expensive than completing the foreclosure process. Lenders accepting short sales receive a substantial percentage of the outstanding loan amount due without waiting for a time consuming foreclosure, and they are able to avoid foreclosure and maintenance fees.

To schedule a free, confidential consulation click below

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