SHORT SALE INFO
Donna Fitts has had successful short sales with numerous lending institutions including Chase, GMAC, Flagstar and Bank of America. The process is not quick but with her diligence she gets an answer and usually the answer is positive for the seller.
Alternatives to Foreclosure
You may be facing foreclosure… so what are your options?!? Try to look at the situation more from a financial standpoint rather than an emotional standpoint. This way you can more successfully analyze which option might best suit your needs and desires to move you towards resolving your financial difficulty. One very important thing to remember: Time is of the essence. Take time to think through your situation and make a decision. Then, take action right away so you have enough time to complete the solution you choose.
Nine options when facing Foreclosure
1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed upon. Credit reports also disclose this damaging information. Not the best option.
2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.
3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.
4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment.
5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.
6. Partial Claim – A loan from the lender for a 2nd loan to include back payments, costs and fees.
7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained, all mortgage payment and taxes must be current. Most loan applications ask if this has ever happened.
8. Bankruptcy – This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy attorney.
--Chapter 7 (Liquidation) To completely settle personal debt.
--Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.
--Chapter 11 (Business Reorganization) A business debt solution.
9. Equity Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale. In this case, the homeowner will get cash from the sale.
10. Short Sale - This is also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value.
SHORT SALE
Expectations and Timeline
Marketing your home:
Your home will be shown to buyers. During this process, it is very important that your property is available to be shown at anytime. The goal is to get the highest and best offer in the shortest time possible.
The First Offer:
Once an offer is received on your property, I will work the numbers to see if it is an offer that the financial institution would consider. If it meets the criteria we will execute the contract and begin “the Process”.
The Process:
Once we have sent the offerto the lender(s), the actual Short Sale process can take anywhere from 4 weeks to 4 months. This timeline varies with each lender.
To keep you informed, you will be able to call any time day or night 251-975-3301. I will also email you updates as I have them from the financial institution.
After the lender reviews the Short Sale package, a BPO (Broker Price Opinion) will be ordered by the lender. This is similar to an appraisal and once the lender receives their report, they will usually make a final decision shortly thereafter.
The lender orders the BPO/Home Valuation so they can figure out what their net proceeds will be (how much of a loss they will be writing off).
Please be patient throughout this process. At times you may feel things are going too slow, but remember this is not a regular transaction and can take longer to complete.
The Accepted Offer:
Once an offer has been approved by the lender, I will notify you that we are going to proceed to close the transaction.
The lender may demand to close escrow anywhere from 10-30 days, so be prepared.
The Close of Escrow:
You, as the seller, will be instructed to sign seller documents just like a normal closing. You will need to provide all keys, garage door openers, and please keep a good attitude. We will celebrate your new freedom from this financial burden and stress.
Your Financial Freedom:
Try not to incur any new debt and try to keep low balances on any credit cards you may have. Maintain good consumer credit by not paying late on your currently active accounts.
Pay your rent by check or some other way that can be tracked to show evidence that you are paying on time. This will help you should you choose to purchase a new property in the future.
I hope this information helps you to keep stress at a minimum during this process and as you prepare for the future.
I understand that this decision may have been very difficult to come to. With that in mind, I just want to remind you that the whole purpose of this transaction is to position you, or you and your family, for a healthier financial future; one which allows security and freedom.
