Trust the most "experienced Edina Realty Short Sale agent", closing over 30 short sale listings." Specializiing in the east metro, including; Woodbury, Maplewood, Cottage grove, Eagan, St. Paul, Oakdale, and Yes! Hudson WI. From homes is "as is" condition with stuccp/moisture problems to hardships. Call today for your confidential consultation
A lender agrees to accept a sale of a property for less than the mortgage owed plus the expenses for having a short sale (realtor, appraisal & attorney fees, e.g.). The lender may or may not absorb the entire loss - the lender may occasionally choose to ask the owner for all or some of the difference. I have seen usually a few thousand to many times, zero. The lender will expect that the homeowner can prove that they can no longer afford payments - and that the inability to pay is a recent development, not that the homeowner misrepresented on the loan application.
Why should a seller consider a short sale?
When there is a hardship, either a job loss, or reduction in income, or about a 20% negative equity position, which includes the selling costs. A short sale is an option when foreclosure or bankruptcy are the only other alternatives. A short sale is may be a negative mark on a sellers’ credit but not as bad as either foreclosure or bankruptcy.
What are the downsides of a short sale?
If the lender absorbs the loss and allows the homeowner to walk away, the IRS looks at the value of that as taxable income, that is until NOW just expended- December of 2012- see below, if it is your primary residence And as mentioned above, a short sale may affect the sellers’ credit. There is also the fact that the seller will not be able to stay in the home - it is a sale.
How does a short sale occur?
A homeowner would contact their lender and if no other options are available (negotiating a different payment plan, loan modification), Most lenders will agree to a short sale instead of foreclosing. A lender may still choose to foreclose if foreclosure would result in a better outcome for the bank. However if they agree, the lender would then require the homeowner to sell the house. The homeowner hires an agent, who agrees to sell the house, the lender then absorbs the realtors commission. Most lenders would insist upon an experienced agent that is not a close relative or neighbor.
As your agent, we need to receive an offer within 30 -60 days, The seller would choose the highest and best offer who, signs the offer, subject to lender(s) approval and satisfaction of that response to you. Then we forward the offer to the bank, along with the agent prepared HUD, and the documentation required by the lender. The bank then either accepts the offer or counters the offer, to what the fair appraised value is determined to be, taking 4-6 weeks. If the lender accepts the offer, a closing usually takes place very quickly. Again, most lenders require that no relative or close neighbor are the buyers.
In Minnesota, we have 6 months before a Sherriff's Sale to Sell and another 6 months afterwards. It is generally easier to work it out prior to the sale however. So Please do not hesitate to call to get started.
It may be wise to begin today as there still may be a window for you to sell short and buy again now.
Together, with our Short Sale Team, We ARE Accomplishing Short Sales more than Ever Before! Call Today for your Confidential Consultation!
We Negotiate:
Wells Fargo, Wells Fargo Short Sales, Aurora, Citi Mortgage, Citi Residential, Countrywide, GMAC, Litton, Saxon, SunTrust Bank, SLS - Specialized Loan Servicing, PHH, Washington Mutual, Quantum Servicing, US Bank, CIT, EMC, EMC Mortgage Serices, Indy Mac Bank, Wilshire and many more.
SEE Wells Fargo See: Wells Fargo Short Sale Info
New Federal Legislation Affecting Short Sales
As most of you are aware, in a short sale, the seller’s lender forgives a certain amount of the debt owed by the seller. Under previous tax law, the amount of forgiven debt is income to the seller. But Congress recently passed a law that changes this tax consequence. Forgiven debt related to the acquisition of a principal residence is no longer income in most circumstances. The new law applies only to:
· canceled debt for property that is a principal residence.
· debt that was discharged on or after January 1, 2007 (it’s retroactive) and before January 1, 2012 Dear Friends, WARNING::: DO NOT BE SCAMMED by giving any Money or info to anyone! As seen on TV per 20 minutes. We WILL NEVER ASK you for any money EVER!!!! I hope this letter finds you in Good Health. May I introduce myself to you? I am Justyna Johnson from Edina Realty. I have been recommended by many to assist with loan modification, Hope Programs, Short Sales and Cash for Keys. With complete dignity and privacy. Allow me to share, In Minnesota, a home owner has 6 months after a Sheriff’s sale to modify, re-finance, or sell the home. You have that right. Please do not abandon your property. I have been specially trained to assist you with any option you would desire, as there are many programs available to assist. I would like to confidentially share with you all of those options. You will be given the same interest, respect and care as your neighbors that use a traditional sales. Your lender may have already contacted you about my program. A Bank negotiated short sale saves your credit vs. foreclosure. Please do not be concerned about any expenses and commissions. There is absolutely no cost for our short sales, as a matter of fact, the lender is happy to compensate me for my efforts, as most lenders today really do not want any more home inventory to try to sell. They servicers generally prefer working with a professional that knows how to handle this unique transaction. They also appreciate that we have a professional title team to manage and handle of the required extra paperwork. Many of your neighbors have trusted me during this difficult time. Wouldn’t be a great satisfaction to know that all of the debt has been relieved. By traditional foreclosure, your debtor could follow you to any new location. Enjoy the peace of mind that comes with your loan satisfaction. Please do call today. It is a matter of public record that your home is in the first stage of the foreclosure process and we want you to know that there are several ways for you to handle this dilemma. Going through foreclosure is very difficult and we understand the hardships you may be experiencing at this challenging time. I know 1st hand this distress. We have the resources that can help you prevent the foreclosure of your home altogether. Our counseling and the helpful information we provide will make the whole process more hopeful for you. We keep everything completely confidential. Our desire is to help you in any way we can and to STOP the downward property values in our community. We have seen checks to sellers in access of $41,000.00 to sellers for completing a short sale! – Ask us how you may qualify for this unique "loop hole" favoring the seller. It does not matter how behind you are or how many loans you have, but time could be against you. Wouldn’t be great if this President could help! Call Today to explore! Sincerely,
.
SEE the NEW Extended Dates: http://www.irs.gov/individuals/article/0,,id=179414,00.html
Justyna Johnson, along with Edina Realty and www.theTrustedTeam.com
SEE http://www.hocmn.org/en/index.cfm for more info
Important Read!
There is a lot of misinformation concerning how a short sale or a foreclosure affects a credit or FICO score. From our research the initial credit hit of a foreclosure and a shortsale are virtually the same. Credit experts report that there will be up to a 300 point credit hit when someone does a short sale or a foreclosure. However, the long term effects of either are radically different...
The main difference is how long the credit is damaged and if there will be any deficiency judgments.
Even well known financial experts like Suzy Ormond are offering misinformation about this. I was watching her on Larry King offering advice to a home owner who was upside down in their home….Suzy told her to
The main difference is how long the credit is damaged and if there will be any deficiency judgments.
Even well known financial experts like Suzy Ormond are offering misinformation about this. I was watching her on Larry King offering advice to a home owner who was upside down in their home….Suzy told her to
"send the keys back to the lender". She didn’t even mention doing a short sale. Nor did she explain the credit ramifications.
No wonder people are so confused.
Let's be clear about this next point. There are definite advantages to a short sale but it has little to do with how many points
A short sale will drop a FICO (in the short term) versus a foreclosure.
Unfortunately, in most communities, houses are over valued and markets will no longer support asking prices. There was a study released recently that reported that at least 50% of all homes in the US were ‘upside down’ or at least have no equity. Another report showed that there are only three communities in the US that have rising appreciation, strong sales and few
If any foreclosures. Did you read that…ONLY 3. In many cases the homeowner is unable to structure a workout or a forbearance agreement with the foreclosing lender. A short sale may be best option.
Clear benefits of the short sale. (New Information)
Fannie Mae recently established a 2-year elapsed time period for reestablishing credit for homeowners who sell their homes through a short sale. Two years may seem like a long time to wait before being able to get a new loan, but compare this to what happens if the homeowner goes through the foreclosure process. According to the Fannie Mae guidelines, effective
May 31, 2008, a homeowner who has filed a foreclosure will be "ineligible" for a loan for five years.
Again. This is a crucial point. Someone goes through foreclosure…no Fannie Mae backed mortgage for FIVE YEARS…in
All reality that means that they will be renters for at least 5 years. To put his into perspective if someone has a bankruptcy they can’t buy for 7 years. This should tell you how much Fannie Mae prefers homeowners short selling over foreclosure.
Consider the fact that property values will most likely fall for the next 12-24 months anyway so, not being able to buy a
Home for 24 months really isn’t all that bad.
The other huge benefit of doing a short sale involves something called a deficiency judgment. When a house is sold at auction (foreclosure), the chances of the foreclosing lender filing a deficiency judgment increases dramatically.
How does this work?…, a deficiency judgment is obtained when a property is foreclosed and sold (usually at the courthouse by the clerk of the court) to the highest bidder. In most states a deficiency judgment can be obtained for the difference between the high bid and the higher foreclosure judgment amount. Usually the court determines which value is higher,
The high bid or the appraised value of the property on the date of the public sale. The higher of the two is taken to determine the difference from the judgment amount, and this difference is the deficiency judgment (what was owed subtracted by the final sale price).
Deficiency judgments are just that: judgments. In other words, a debt that has to be paid. They are an albatross around the neck of the debtor and can only be removed by paying it off or by bankruptcy. Furthermore, deficiency judgments usually earn interest until paid.
If a homeowner has deficiency judgment, guess what? They won’t be able to buy anything using credit. New house?
Forget it. New car? Nope!
In the past few deficiency judgments have been filed against foreclosing homeowners. That may change. Banks seldom enforce deficiency judgments; they sell the judgments for 5 to 10 cents on the dollar. Here’s the deal that the bank has to consider . . . for a $100,000 deficiency judgment they invest $500 in attorney fees and get $10,000 in return just for pushing paper. In other words, they get the judgment…then sell it to a 3rd party for 10% of the amount.
Our short sale department knows that they can negotiate unsecured promissory notes. Sometimes when the second lien holder won’t release their lien in order for the short sale to close our team knows how to structure an unsecured load for 10%
Or less of the amount. Usually at no or very low interest. The banks do the same thing –– getting 5 cents on the dollar.
Another point of consider, if the house goes into foreclosure and is taken back by the bank to be listed as an REO, the meter keeps running on the costs incurred by the bank until the REO dept. sells the house. This can make the deficiency huge.
In other words, the former homeowner is on the hook for all the banks costs.
MORE OPTIONS:
Refinancing: The CMA can help a mortgage broker calculate the all-important LTV to see whether the homeowners would likely qualify for loan to refinance their mortgage and perhaps even consolidate debt.
Loan modification: When homeowners can prove that they are upside-down in their current mortgage (owing more on the home than they can sell it for), lenders have much more to lose by foreclosing and much more to gain from a loan modification. A current CMA can often convince a reluctant lender to approve a loan modification request. How do I qualify for a mortgage modification?
The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):
- Mortgage Modification
- H.O.P.E.
- Loss Mitigation
Prior to contacting your mortgage lender you can quickly complete an eligibility test at www.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP).
For a list of mortgage lenders and servicers, visit www.HopeNow.org.
Short sales: Sometimes homeowners want to get out from under a property they can no longer afford, but they cannot sell it for enough to pay back all the money they owe on it. Lenders may be willing to accept less than they are owed to allow the homeowners to sell and walk away debt-free, but they will want to see a CMA before agreeing to such a proposition.
Short refinance
Principal forbearance: A principal forbearance is sort of a cross between a short refi and a loan modification, but the lender does not completely forgive the difference between what’s owed on the property and its market value. Instead, the lender agrees to collect the difference later - when the homeowners sell or refinance the property. Like a short refi, the new monthly payment is calculated on a lower principal balance (based on the property’s market value), resulting in a lower monthly payment. The CMA is key for establishing the property’s true market value.
Good News in reference to short sales then purchase again. Here is the guideline from one of my lenders.
Our investor would treat a short sale much as a foreclosure if the pre-requisites detailed below have not been satisfied. Provided we are able to satisfy the requirements detailed below, there is no additional seasoning to consider a new loan. Please see excerpt below for further details, this information may be found under section 800, page 807-11. Please let me know if you have any further questions or concerns.
Short Sale / Short Payoff of a Past Loan (not the subject property)A short sale or short payoff is a transaction where the mortgage lender agrees to accept a lower amount than is owed on the property. If the borrower has had a prior short sale/short payoff, they may be considered for a new mortgage without a specific time period having elapsed provided the following conditions of the short sale/short payoff were met:
• The mortgage on which the short sale or short payoff occurred was not delinquent; and
• The minimum mortgage payment history requirements are met, as determined by the documentation process selected, but in no event were greater than 0x60 in the 12 months prior to the credit report date; and the borrower was not obligated to repay any amount associated with the short sale or short payoff, including a deficiency judgment.
Indications that may identify a short sale/short payoff include (but are not limited to) a 1099 from the mortgage lender or the word "settled" noted on a mortgage line or large trade line of the credit bureau. If the above requirements are not met, the short sale/short payoff must be treated as a pre-foreclosure sale —a 4-year time period must have elapsed from completion date (or a 2-year time period due to extenuating circumstances).
