Frequently Asked Questions

Knowing what type of loan you have is crucial to the process. There are often specific short sale requirements unique to each loan type. You can find this information by looking at your mortgage statement, the settlement  papers from when you originally purchase the property, or by calling your lender.

It is impossible for us to negotiate with your Lender without  some basic information. Plus we are willing to put our time and energy into your property  in order to assist you which we cannot do without  your help. Rest assured, the information that you provide us is confidential and will not be shown to anyone but the foreclosing lender.

Yes. We protect your documents and privacy as we would our own. Anything run through our web-based program is also highly protected  and secured.

Yes, absolutely. However, certain immediate steps may be necessary to get the foreclosure date postponed. You need to quickly complete the package of required forms, get your property  listed right away, and cooperate wholly with your agent. A 3-way call to your lender may also be necessary to speed up authorization. There are no guarantees that there is enough time to get a postponement.

The foreclosure process is different  in each state. Be sure to ask the person assisting you what the process is in your state.

No. The foreclosure clock will continue to tick. Postponement requests can be made if necessary. Your

Lender will only postpone foreclosure proceedings if they are certain a buyer will perform.

Typically not. The foreclosing lender will not allow anyone to purchase the home through which you could become a direct beneficiary of the property  and potentially  re-sale for a profit.  Furthermore, by allowing you the privilege of a short sale you are required to relinquish all use and benefit associated with the property.

Yes. Be sure to research your options. Call your lender immediately.  Lenders already have too many bank owned property.  Call them directly to discuss options to keep you in the home.  They may provide you with an easy repayment plan. They may be able to offer a loan modification to help.

No. Filing bankruptcy will not stop the foreclosure process, just delay it The property  will eventually be out of bankruptcy protection and be back in the foreclosure process where it was when bankruptcy was filed. For further  bankruptcy information, please seek the advice of legal counsel.

Bankruptcy will stay in your credit reporting agency files for ten years. Now, declaring bankruptcy doesn’t necessarily mean that the door to future credit will be forever closed to you. If you take the proper steps after declaring bankruptcy and also manage your credit responsibly, you can rebuild an improved credit reputation in a few years. Please consult a credit counselor or a major credit bureau for more information.

Please consult your own financial advisor or the credit bureaus directly for the answer to this question. From experience only, we can say that foreclosure is much more damaging to your credit. A short sale will most commonly be listed as “settled debt” and is less harmful to your credit.

Unfortunately, there is no specific answer for it except to say that it could be a considerable amount of time (more than the 2 years on a successful short sale). Most lenders view your financial history as an indicator of what you will likely do in the future. If you missed several months of mortgage payments leading up to your foreclosure, then a lender will see you as a likely candidate to default on a future loan
–in other words, you are a big risk.

Knowing what type of loan you have is crucial to the process. There are often specific short sale requirements unique to each loan type. You can find this information by looking at your mortgage statement, the settlement  papers from when you originally purchase the property, or by calling your lender.

It is impossible for us to negotiate with your Lender without  some basic information. Plus we are willing to put our time and energy into your property  in order to assist you which we cannot do without  your help. Rest assured, the information that you provide us is confidential and will not be shown to anyone but the foreclosing lender.

Yes. We protect your documents and privacy as we would our own. Anything run through our web-based program is also highly protected  and secured.

Yes. Be sure to research your options. Call your lender immediately.  Lenders already have too many bank owned property.  Call them directly to discuss options to keep you in the home.  They may provide you with an easy repayment plan. They may be able to offer a loan modification to help.

Millions of homeowners are asking themselves this question!

Right now we have 10-14 million homeowners with no equity or negative equity

(Also known as “Underwater” or “Upside down”- Owe more than home is worth).

Some projections expect over 20 million homeowners will have negative equity in their homes in the very near future.

You are not alone. The current situation:

1.   The number of homeowners missing mortgage payments is rising.

2.   Notice of Defaults (90+ days late on mortgage payments) are rising.

3.    Foreclosures are at record levels.

4.    Unemployment  is at 25 year highs.

In other words, expect more foreclosures and tough economic times because major housing and banking issues have an impact on the entire economy.

If a foreclosure is inevitable there aren’t  many options. At this point it comes down to financial recovery.  A short sale will eliminate the unmanageable mortgage payment and it will allow you to recover sooner.

Here are four reasons people choose a short sale:

1.   Can ‘t afford current mortgage payment.

2.    Negative Equity – The loan amount is higher than property value.

3.    Refinancing is not available.

4.    Can’t sell the property.

The current housing crisis is different from all the previous housing recessions. Relaxed loan standards and speculation lead to skyrocketing housing prices.  Home prices increased at an unsustainable rate.  A correction was inevitable.

It is also well known that many financial institutions sold mortgages in a deceptive manner.  For example, by approving people for loans they couldn’t really afford or understand. Lenders also pushed terrible loan products such as the Option ARM loans to collect higher up front fees.

Let’s  be very clear about this next point. ..Yes, there is damage to your credit with a short sale.  However, it is not as bad as a foreclosure.

A short sale will prevent you from buying a residence using a government backed mortgage for up to 24 months. With a foreclosure, the timeframe to qualify is 4-5 years.

In cases where the homeowner is staring at an eventual foreclosure, it’s a clear cut advantage to utilize a short sale. The short sale option is much better. A short sale will allow the homeowner to buy a home much sooner and allow a family to rebound faster.

A short sale is when your Lien Holder(s) agree to accept less than you owe in order for you to sell your home. They agree to a discount of the mortgage debt owed.

A Lender or bank takes a discount or agrees a short sale because it saves them money. It gets bad debt off their books so they can reinvest that money by giving out another loan to a customer. On average a Lender loses between $30,000 to $80,000 on each property that they take back as a bank owned property.

In many cases a short sale is necessary in order to get you out from under your mortgage

debt. By doing a short sale, you will be able to take a large bite out of the money you owe to your mortgage company, so that you are no longer liable for the entire amount.

The answer is no. The majority of the lenders do short sales however; there are a select few that do not do short sales.

Most everyone who is facing a true financial hardship qualifies for a short sale. However, each Lender and Loan Type has a different  set of requirements  specific to them. The general requirements for a seller to qualify for a short sale are: A provable financial hardship, behind on payments or facing imminent default, No equity in the property  being shorted, no liquid assets, and a lender or loan type with a clearly defined short sale process.

Knowing what type of loan you have is crucial to the process. There are often specific short sale requirements unique to each loan type. You can find this information by looking at your mortgage statement, the settlement  papers from when you originally purchase the property, or by calling your lender.

Some Lenders will entertain  taking a discount when a homeowner  is current on their mortgage however they typically require the property  to be listed for sale by a licensed real estate agent.

This depends on the Lender. Some Lenders require a property to be 90 days in default before they will entertain a short sale offer; other Lenders will entertain a short sale even if it is not in default.

Every Lender or Bank has its own set of required information and some may even have a set of paperwork specific to them. But, in general, most banks require at least the following:  A handwritten hardship letter, financial statements, 2 years tax returns, 2 months bank statements, 2 months paystubs, and that you have the property  listed for sale at fair market value. Throughout the process additional paperwork may be requested. So, be sure to keep everything handy.

It is impossible for us to negotiate with your Lender without  some basic information. Plus we are willing to put our time and energy into your property  in order to assist you which we cannot do without  your help. Rest assured, the information that you provide us is confidential and will not be shown to anyone but the foreclosing lender.

Yes. We protect your documents and privacy as we would our own. Anything run through our web-based program is also highly protected  and secured.

The steps and process of a short sale can be broken into 9 main steps. The most important  parts of the process for you are to help in the beginning to gather the paperwork required and to help list and sell your home. As your short sale is negotiated, you will be provided regular updates throughout the process.

Depending on what state you are from, this answer will vary. For example in the State of Connecticut a short sale typically takes between 2 to 4 months. The short sale time-line is subject to your Lender or Bank. Many banks are overwhelmed right now with short sale requests. However, most do have an understandable review process.

Unnecessary delays can be avoided by not sending incomplete short sale packages. Incomplete offers are often passed over or rejected. Your file is then closed and you would have to start over from the beginning. It is very important to be sure you provide everything required by your Lender and requested by the person helping you negotiate.

Yes, absolutely. In fact, if the first mortgage is being asked to accept a discount, they will require that all other lien holders discount as well in order to give short sale acceptance.

Yes, absolutely. Tax liens can be released from a property  or reduced and paid at closing. Please consult the appropriate  tax professionals for more information.

If you provide an email address that you check daily, you will be given continuous e-mail notification from our online system each time something is done to your file, new paperwork is needed, notes are posted, or any progress is made.

No. You are not required to call your lender. However, in certain instances it is often helpful to the process for you to call.

This gives the people negotiating on your behalf permission to talk with your lien holder(s).

Yes, absolutely. However, certain immediate steps may be necessary to get the foreclosure date postponed. You need to quickly complete the package of required forms, get your property  listed right away, and cooperate wholly with your agent. A 3-way call to your lender may also be necessary to speed up authorization. There are no guarantees that there is enough time to get a postponement.

The foreclosure process is different  in each state. Be sure to ask the person assisting you what the process is in your state.

No. The foreclosure clock will continue to tick. Postponement requests can be made if necessary. Your

Lender will only postpone foreclosure proceedings if they are certain a buyer will perform.

Immediately. The Lender typically will not stop or slow down a foreclosure unless a property  is listed for sale by a licensed real estate agent.

Yes and no. Some Lenders require a property  to be listed when they take a short sale or short payoff.

You should ask the Foreclosing Lender, at the beginning of your short sale, whether you need the property listed.

We understand. However the market has changed and every property is different. There has been a reduction in the average value of comparable homes in your area and you must sell your home right away to avoid a possible foreclosure. To do this requires that you list your home at a price that will sell. Understand that Buyers will always look for the best deal. If your property  is priced higher than competing homes, Buyers will pass it by.

I understand. Depending on your circumstances it may not be necessary to advertise your situation. However, you need to list the home at a price that is below what you owe. That means that all offers you receive must be contingent upon approval of a short sale. Most are an MLS (Multiple Listing Service) guideline requiring that such contingencies be fully disclosed. The remarks must, at the very least, include that the sale of the property  is “subject to third party approval.”

Yes. It is likely necessary to list your home for an amount that is less than you owe on your mortgage and not enough to cover all other associated fees. To sell requires short sale approval from your Lender or Bank. That makes all offers received subject to your Lien Holder(s) approval of a short sale.

Yes. Most lenders require that a short sale offer be submitted  before they will even accept a short sale package, order an appraisal, and make their review. They typically will not spend the time and resources to review your situation unless they know that a buyer will perform.

Should your neighbors have their property appraised in the next few months, their appraiser will use recently sold comparables to determine  value. Appraisers generally do not include any ‘distressed’ sales, like the sale of your home, in their evaluation. In the long run the average property values in your

neighborhood will not be damaged by the short sale of your home as much as they would if the property became bank-owned.  Vacant foreclosure listings that sit for long days on market and then sell at heavily discounted prices are much more damaging to neighborhood home values.

Be sure that you are doing as much as you’re able to help your agent sell your home. Keep the home show-able, stay in communication, be available to review or sign paperwork, support any of your agent’s marketing efforts, and if possible, keep the utilities on for Buyer inspections.

When you are listing your property  make sure your real estate agent adds the remarks “home to be sold AS-IS”. By doing this, Buyers will be aware that you cannot or will not make any improvements  on the property. Be sure that your agent clearly expresses this to the Selling Agent and protects you in negotiations.

Typically not. The foreclosing lender will not allow anyone to purchase the home through which you could become a direct beneficiary of the property  and potentially  re-sale for a profit.  Furthermore, by allowing you the privilege of a short sale you are required to relinquish all use and benefit associated with the property.

Yes. Be sure to research your options. Call your lender immediately.  Lenders already have too many bank owned property.  Call them directly to discuss options to keep you in the home.  They may provide you with an easy repayment plan. They may be able to offer a loan modification to help.

Yes, absolutely. You will need money for moving expenses. Also, in some rare instances you can offer a good faith payment to your lender to encourage them to approve your short sale.

A homeowner  cannot accept money from the sale of their home if a Lender accepts a short payoff or a short sale. However, there are exceptions to this statement; for example an FHA (Federal Housing Authority)  insured loan will allow a homeowner  to receive $1000.00 when taking a short payoff.

In most instances you will not A short sale is designed to assist the homeowner.  All items due and payable at closing are meant to come from the Buyer’s funds. You will generally not have any out-of-pocket costs to pay real estate commissions, closing costs, or any other items due and payable at closing.

If a ready, willing and able buyer is not found and the Foreclosing Lender does not accept “an acceptable offer” then there will be no expenses due from the seller/homeowner. Make sure your real estate agent disclosed that the sale is “subject to lien holder(s) approval or 3,,party approval” so that you are protected.

Yes. If you file for bankruptcy protection you Lender or Bank will be unable to discuss the terms of your short sale until the bankruptcy is released or discharged. A bankruptcy puts an “automatic stay” on any credit/debt collections which include negotiating a short-pay of your mortgage(s).

Any pending foreclosure sale dates will be postponed as foreclosure is also a credit collection. Be sure that you inform your agent immediately  upon making this decision. If you choose to file, please provide your

agent with any paperwork involving the property  that you receive from the Lender of bankruptcy trustee. For further  information, please consult with a bankruptcy attorney.

The Buyer will need to either increase their offer to meet that number or your agent will need to find another buyer that meets your Lender’s requirements.

No. Filing bankruptcy will not stop the foreclosure process, just delay it The property  will eventually be out of bankruptcy protection and be back in the foreclosure process where it was when bankruptcy was filed. For further  bankruptcy information, please seek the advice of legal counsel.

Bankruptcy will stay in your credit reporting agency files for ten years. Now, declaring bankruptcy doesn’t necessarily mean that the door to future credit will be forever closed to you. If you take the proper steps after declaring bankruptcy and also manage your credit responsibly, you can rebuild an improved credit reputation in a few years. Please consult a credit counselor or a major credit bureau for more information.

Please consult your own financial advisor or the credit bureaus directly for the answer to this question. From experience only, we can say that foreclosure is much more damaging to your credit. A short sale will most commonly be listed as “settled debt” and is less harmful to your credit.

You will not have to wait 10 years to be considered for a home loan. However, do expect to wait at least five years and only then will a lender consider your loan application if you have stayed current on your bills after the bankruptcy.

There are new loan programs designed to help people who have recently had to short sale their home. You can apply for a home loan in as little as two years provided you have maintained your credit with good payment history, kept your debt-to-income ration within lending guidelines, and have verifiable income.

Unfortunately, there is no specific answer for it except to say that it could be a considerable amount of time (more than the 2 years on a successful short sale). Most lenders view your financial history as an indicator of what you will likely do in the future. If you missed several months of mortgage payments leading up to your foreclosure, then a lender will see you as a likely candidate to default on a future loan
–in other words, you are a big risk.

No. However. it would be very helpful to your agent to leave all utilities on for Buyer inspections. If it is winter time, be sure that you have winterized the home properly before having utilities turned off.

Anything that you are going to take from the property needs to be clearly disclosed to any Buyers viewing the property. Be sure to leave all fixtures that traditionally remain in the sale of most homes, in working order.