WHAT IS A SHORT SALE?

A short sale is when the balance on the mortgage exceeds the proceeds after paying all closing costs when selling your home.

If the bank doesn't accept a Short Sale, they will have to Foreclose on the property. Here are a few reasons why they don't want to do that.

1. Instead of accepting a Short Sale they continue to lose money.
2. After they go through the entire Foreclosure process, they could very well contact me (a local Realtor) to List the property again and Sell it. (This process just wasted an additional 8 months)
3. When a local Realtor sells a Foreclosed Bank property, the Bank will pay all the fee's associated to the Sale. Realtor fee's, attorneys fee's and all closing cost.
   The Bank does not want your home in there Portfolio. I will get the Fair Market value of your home for your Lender. Your Lender will verify the fairness of the offers I submit by sending an appraiser to your home at no cost to you. (I personally meet all the appraisers

• Most mortgage companies will not proceed with a short sale until you have an offer on your property. Therefore, it is encouraged that your home is listed right away.
• Once an offer is in place the realtor/attorney will begin negotiations with the mortgage company.
• The mortgage company will review the package to make sure it's complete and then assign it to a negotiator. This is the individual that will work on your file.
• The negotiator will order a BPO (Broker Price Opinion) / Appraisal and do a financial analysis. The mortgage company negotiator will inform the realtor/attorney if the offer is too low.
• If your mortgage involves a PMI company, then 2 approvals are needed for the short sale.
• Who qualifies for a short sale?
• In order to qualify for a short sale you must show a hardship letter.  
  • Examples: Unemployment, decrease in pay/salary, requirement to move for work, serious medial problems, loss of a spouse that was the primary breadwinner, divorce.
• Mortgage companies will look at a seller’s ability to pay.  If you have the ability to pay, the mortgage company will not qualify you for a short sale.

• In a foreclosure, the mortgage companies will obtain a judgment of foreclosure against the seller. The bank will pursue a deficiency judgment in foreclosure. However, in most short sales it is possible to convince a lender to give up the right to pursue the deficiency judgment.
• If you lose your home to a foreclosure you will be ineligible for a Fannie Mae backed mortgage for 5 years vs. 2 years with a short sale.
• If you are an investor who loses their home to a foreclosure the will be ineligible for a Fannie Mae backed loan for 7 years vs. 2 years with a short sale.
• Your credit score will be lowered approximately 250-300 points with a foreclosure and will effect your score for over 3 years. On a short sale, only late payment will be reported. After the short sale is completed, the mortgage will be reported as paid or negotiated. This will lower your score by approximately 50 points if all other payments are being made and will stay on your credit for 12-18 months.
• A foreclosure remains on your credit history for 10 years or more; short sale is not reported on a credit history. As of right now, there is no specific reporting item for a short sale.
• In foreclosures the home will go to auction and then possibly the REO process which will most likely result in a lower sales price and higher deficiency judgment. In a short sale, the home is sold at a price close to the market value which is better than and REO sale, thus a lower deficiency.
• Even if the mortgage company will not release you from the liability of the deficiency, you will discharge more debt in a short sale then you will in a foreclosure due to the additional fees a foreclosure incurs (attorney fees, court costs, interest, late fees, etc.)