Short Sale: a win for you and a win for the bank...

What is a Short Sale?

The lender agrees to accept a lower price for the house, as full compensation for loans they have against it, as full settlement for the loans.  Both the first mortgage and second mortgage, plus any other liens on the property, will be settled before escrow closes.

Do I qualify for a Short Sale?

In the past, Short Sales were only considered for extreme financial hardships such as: divorce, insolvency, and death of a key member which supported the family financially.

In today's financial crisis, Short Sales are being used every day by people to avoid foreclosure by working with the bank to sell their property at current the market value, even when loans on the property exceed it's value.

How does a Short Sales work?

A Short Sale is accomplished like typical real estate sale: you contact a real estate agent and sign the usual property listing agreements - the transaction is accomplished through escrow just like any other normal home sale.

What is in it for the bank?

Foreclosure costs for banks run about $50,000 per house.  The Trust Deed sale is all cash auction - houses typically sell for much lower price than a Short Sale transaction.

Please call my team at 714 658-5739, or email anewstartoc@gmail.com to discuss whether a Short Sale will help your situation.

TAGS: foreclosure, real estate foreclosures, foreclosure help, "short sale", "stop foreclosure"

What happens to the second loan?

If the second loan was part of the original purchase of the house, this loan is cleared by a Short Sale without any recourse by the lender (This is referred to as a "Purchase Money Loan").

If the second loan was refinanced; either a Line of Credit (HELOC) or "cash out", then the agent will negotiate with the lender to settle these loans.  The goal is to have this loan satisfied by the short sale to avoid a Deficiency Judgment at some future date.

Will I pay for this service?

No, a Short Sale is just like any other real estate transaction where you use an agent.  All fees and commissions are paid by either the bank or the buyer.

What is the impact to my credit score?

A Short Sale is the remedy which solves your mortgage problem with the least impact on your FICO score - foreclosure will have the most severe impact.