Short Sale Options
SOME POSSIBLE OPTIONS
REINSTATEMENT
Payment of the past due amount plus fees and costs in one lump sum that will “cure” the default of your loan.
PAYOFF
Payment of the entire loan balance in one lump sum.
FORBEARANCE PLAN
An agreement to temporarily reduce or suspend your mortgage payments for a short period of time.
REPAYMENT PLAN
An agreement that allows you to pay the past due amount over a fixed period of time. Your monthly payment will include a portion of the past due amount plus your regular monthly payment.
DEED-IN-LIEU OF FORECLOSURE
You agree to voluntarily transfer title of your property to the lender prior to the foreclosure sale.
SHORT SALE
A private sale of your property for less than the full payoff of your loan.
See if You Qualify for a Short Sale
1. Do You Have A Hardship?
2. Have you missed any mortgage payments?
3. Is your home upside down?
4. Do you want to save your credit from a bankruptcy and/or foreclosure?
If you answered “yes” to any of the questions above you may qualify…
The main goal of a short sale is to prevent foreclosure, however, the bank’s decision to move forward with a short sale is dependent on whether there will be a smaller financial loss taking the short sale or in the carrying costs associated with foreclosure. Typically, a bank will determine the amount of equity by determining a probable selling price from a broker price opinion (BPO) or appraisal, and decide to approve or deny the short sale based on the offered short sale price difference compared to the cost of foreclosure. Banks will not accept all short sales, and a trained, knowledgeable real estate professional is paramount to the process of getting a short sale approved.
For a FREE consultation with negoiating with your bank call me at 562-246-5200
Things to bring…
Financial Form ~ list of itemized assets and liabilities.
Two years most recent tax returns.
Two months most recent paycheck stubs.
Two months most recent bank statements.
Hardship Letter.
Authorization to release information ~ This document gives you
permission to act as the agent on the Seller’s behalf and to obtain
information. Please include all lien holders and account numbers.
This must be filled out and signed.
If you do not have check stubs, taxes and/or bank statements have them write a statement to that fact and sign it.
I recommend you contact a tax professional with regard to the possibility of adverse tax implications that might be associated with a short sale.
THE RAYBURN TEAM SHORT SALE FAQ’S
What is a Short Sale?
A short sale, negotiated settlement, or short pay occurs when a lender agrees to accept less than the amount owed to payoff a home loan as an alternative to foreclosure. The lender usually agrees to a short sale because they know if they take the property back through foreclosure they are going to take a much larger loss.
How does THE RAYBURN TEAM get paid?
We will negotiate directly with the bank for all real estate agent commissions. In most cases, the bank will offer the listing agent a smaller than average fee for performing the marketing and negotiation responsibilities associated with representing a seller.
How Long Will it Take?
The short sale negotiation process is a lengthy one. It may take several weeks to months before a lender and home owner can agree on acceptable terms. Many lenders have layers of bureaucracy, insurers and investors that we will have to maneuver through in order to get your short sale approved. We will keep you informed of the progress throughout the entire transaction.
But My House Is Going to Foreclosure, Will I have Enough Time?
Starting a short sale will not automatically stop the lender from starting the foreclosure process. However, we have successfully convinced lenders to postpone a foreclosure while we negotiate a short sale. While there are no guarantees, we will doing everything that we can to get your home sold before the lender follows through with their foreclosure and we are successful over 85% of the time.
Can I Stay in the House?
The purpose of a short sale is to get the property sold. So, you will be moving. This is not a program that can stop a foreclosure and allow you to keep the house indefinitely. It is a lengthy process and you can stay in the home until the sale is complete.
Will This Have Any Impact on my Taxes?
On December 20th, 2007, President Bush passed “The Mortgage Forgiveness Debt Relief Act of 2007” which allows California Homeowners a (3) year window to avoid paying taxes on the loss the lender takes. Before this act took affect, “If the value of your house declined, and your bank or lender forgave a portion of your mortgage, the tax code treated the amount forgiven as income that can be taxed.” According to “The Mortgage Forgiveness Debt Relief Act of 2007″ if you sell your home as a short sale by December 20th, 2010, the loss the lender takes will not be considered taxable income by the IRS.
The IRS often gets involved with short sales because they are seen as a relief of debt and may be treated as income. Please check with your accountant and let them know about “The Mortgage Forgiveness Debt Relief Act of 2007.”
What type of paperwork do I need?
The lender will require a view of the financial package that usually includes:
Hardship Letter
Authorization to speak to Lenders
Financial workout sheets
(2) Months’ bank statements
(2) Months’ pay stubs
(2) Years’ IRS tax returns
Mark Anthony Ruiz
714-815-4634
