Search results matching tag 'short sale options'

How a Short Sale Beneficial to a Bank

478114 — Mon, 30 Aug 2010 22:12:00 GMT

How a Short Sale is Beneficial to a Bank

A short sale is basically a sale that is carried out in the real estate market. There are several scenarios where a home owner falls back on a home loan because of different reasons. In this situation, the bank might move towards a foreclosure and the home owner might come into a difficult situation, not to mention an embarrassing one. However, with the short sale process, there is a benefit to the bank as well as the home owner. Here are the three basic benefits of a short sale for the bank. Banks Get Liquidity: Traditionally, banks have no interest in owning real estate.

Owning real estate for any other purposes other than having their offices can tend to be a losing proposition to the bank, because then they would be bound by various aspects like rise and fall of real estate market, geographical lucrativeness of the real estate, etc. Also, even if they do get the property, it is not always possible for them to sell it quickly or at a price that they would like, because the real estate that they would own would be affected by the same aspects that the other estates in the market are. Because banks do not want to bother with these aspects, they would consider a foreclosed real estate as a dead investment.

A short sale allows the bank to get their liquidity back, with a certain amount of it written off as a bad debt. Hassle-free Process: Short selling is quite a hassle free process, as compared to the mortgage or other kind of processes that can be carried out to get the loan or mortgage back. It is also a process where the bank would get unequivocal support from the home owner, because it solves the problem for both the parties. For example, foreclosing a mortgage is not as simple as it would seem for the banker as well as the debtor. There are several fees and charges that the bank would have to pay for the completion of the process. With approving a short sale, the bank basically saves itself from the vast number of fees and charges that they would need to pay otherwise. Rubs off History of Delinquent Loans for Banks: If you though that loan history matters only for individuals, you are in for a surprise. Even banks do need to keep an eye on the number of bad loans, and they might not be able to do business as they would like to if they have several bad loans.

Therefore, a short sale is a very good way out for the banks, because not only do they get a considerable amount of their loan back, but also clear out their history of bad loans. These are the three major advantages for the money lender bank for going in for a short sale, as opposed to a foreclosure on the loan against real estate. Short sales are not just beneficial for the bank but also beneficial for the house owner. Therefore, more and more mortgaged homes are being sold in the short sale procedure, saving a lot of time and money for both parties.

Selling your home for less than what you owe AKA Short Sale

478114 — Wed, 27 Jan 2010 13:59:00 GMT

So, what is a short sale? A short sale is a way of selling your over encumbered property. Many people find themselves with property that they purchase in 2004-08 at market price and now find that they actually owe more than what it's worth. Most have seen a significant drop in value. So what are your options?

1) Continue paying and hope someday it will even out
2) See if a Loan Modification will help
3) Give the property back
4) Stop Paying and get foreclosed
5) Do a short sale

Option 1, if you continue to pay you may eventually even out but it may take years. If the difference from what you paid and what's its worth isn't that significant you may want to opt and hold on. If the gap is too large you may just be burning your money. Find out how much your home is worth and make a decision.

Option 2, If you have a crazy loan, high rates, variable rate, ARM, this might do it. Call HUD and find out what they can do for you. If you have income to pay you will be surprised what they can do for you. They will not modify if they see there is no income.

Option 3, You just walk away. Most people can't afford to do this. In essence you call the bank and you tell that you want to return the property to them. Many times they will offer what is called "cash for keys". Meaning that they will pay you once you leave the house and give them the keys. It's a nominal amount but it's something.

Option 4, This one doesn't make too much sense as you do have a lot of options. Don't get me wrong, if you can't pay you can't pay but still try to get modified and still list and try to sell your home. The results will be the same and if you do a short sale or loan modification odds are you will stay in the house much longer.

Option 5, Short Sale, why? Out of all the options this is a viable option because the time factor. If you default you will be forced out in 90 days from the notice of default. But with a short sale or loan modification you will still be in foreclosure but there will be no sale date. Normally when you are either doing a short sale or loan modification they will take it off calendar so that they have enough time to review.

Luis Pezzini
lpezzini@SunsetStripRealty.com
http://www.TheShortSaleAlternative.com

Short Selling, Foreclosures and otehr option

478114 — Thu, 27 Aug 2009 20:05:00 GMT

Short Selling, Foreclosure, And Other Options

Many people are suffering with crushing mortgage payments all around the country. States such as California, Nevada and Florida are really struggling. With high unemployment and the potential for it to grow even more, and suddenly higher mortgage payments due, consumers are trying to learn more about all of their options to see if there's something that can be done to help them out.

There are some options for consumers that they can look at. Some are drastic; some might end up being pipe dreams. But at least there are options.

The first option is to try to short sell your home. Short selling means you're willing to sell your home for less money than it's worth. As home prices have gone down, it has brought property values down also. A high number of people are suddenly paying more for a house than it's worth. If they need to get out from under the high payments, and can't sell the house for what it was initially worth, they may be willing to take a financial hit just to get out from under it.

With a short sell, the homeowner might still be liable for the difference between what was owed and what the house just sold for. It might be a minimal balance, in which case it'll be easy to pay, or the bank may waive it. If neither of these occurs, you will have a red flag on your credit report.

The second option is to allow your home to be foreclosed upon. Though this is a terrible option, it does have some benefits, strange as that sounds. One, foreclosures actually take a long time to push through. You could receive a notice within a couple of months of missing payments, but still be in your home for up to a year, especially if your home is in a distressed area. This means you don't have to immediately worry about moving if you need some time to think.

Also, at any point in the process, if your financial picture improves you can pick up on the payments and get out from under the foreclosure notice. This means you'd get to keep your house, and instead of a notice of foreclosure on your record, you'd have a notice of falling behind on your payments, which is still a negative, but not as bad as a foreclosure would be.

The third option would be to contact your bank and look to renegotiate your mortgage in some fashion. They may be willing to give you a couple of months of lower or no payments, throwing the full payment towards the end of your mortgage. You might be able to get a lower interest rate on your mortgage, although your credit score will have to be really high to get it, since banks haven't been all that willing to renegotiate, even with the government's push.

The fourth option is a wild card. You could decide to go for a forensic loan audit. This means you'd hire a legal firm whose sole goal is to go through your loan arrangement thoroughly, looking for some kind of error. If they find out, it might give you a loophole to canceling the contract and walking away without any penalties whatsoever. The cost of paying for one of these audits averages $500, but it's always possible that the people who created the original contract threw in something that doesn't conform to either state or federal law, and there's nothing saying that the lawyer you had to hire on your behalf to buy your home didn't miss something.

As I said, there are many options available; decide on which ones you feel will work best for you. That last option, though, might be the least expensive option to try.