What is a short sale
Generally, a short sale is when a property is sold for less than the full amount owed. When this happens, the property is said to have been ‘sold short’.
The short sale process is often a great option for homeowners who need to sell a home that has depreciated to the point where it is worth less than a mortgage. It’s a real solution to avoid foreclosure and all the problems that come with it. Every short sale is different and has several possible outcomes – I work hard to get my customers:
– Full resolution of all outstanding mortgage loans
– exemption from deficiencies – after the fact you have no debts to the lender!
– All fees paid by the lender – nothing out of your own pocket
– Up to $ 20,000 cashback on closing, subject to conditions and eligibility
If you believe a short sale is right for you, please contact me to schedule a hassle-free phone call and discuss the process.
Programs available for short sale
HAFA – This is probably one of the best programs available for homeowners in financial distress. The Affordable Alternatives to Home Foreclosure Program was created by the federal government to allow eligible homeowners to transition to more affordable housing with many important benefits. These include full relief from the shortfall (outstanding loan balance), less impact on your creditworthiness, and greater chances of getting your funds back quickly, and finally a $ 3,000 cash payment at close for relocation assistance. Due to these advantages, I recommend all my clients to apply for the HAFA program. For more information on this program directly from the government, visit the HAFA website.
Lender Fast Track Programs
There are several programs available through specific lenders that can either speed up your short sale or provide an additional cash payment over and above HAFA relocation assistance, or both. Many of these programs are only available for specific loans from specific lenders so it is important that you contact me and provide your home and loan details so we can see if you are eligible. Some of the more famous fast track and payout programs include:
– Bank of America Fast Track by Equator
– Wells Fargo Fast Track program for Wachovia loans (these are also eligible for additional relocation up to $ 20,000)
– Chase Fast Track Program for Washington Mutual Loans – ARM option in particular (may qualify up to $ 30,000 in cash at close)
– Wells Fargo Fast Track Program for World Savings Loans – Pick-a-payment and ARM in particular (may qualify up to $ 30,000 in cash at close)
These programs are usually offered in addition to the HAFA program. There are more programs available than those listed above, and new programs are available every year. You may not be eligible for an additional cash payment from your lender, but as an agent, I will research all your options to try and get as many benefits as possible – cash or otherwise. Submit loan details to see what you may be eligible for.
The basics of short selling
For many Illinois homeowners, the prospect of losing their home in an execution is a frightening and emotional process. What doesn’t help is the large amount of sometimes conflicting advice and information. Studies have estimated that between 2006 and 2013 – just 8 years – nearly 20% of homeowners nationwide will have to be foreclosed – that’s 1 in 5 homes. The entire short selling process is basically simple, but often comes with a lot of complications. Therefore, almost every short sale I have helped in the past 5 years has been unique at least in some ways. To help explain what short selling in general is, I created this page. It should be noted that since each short sale is unique, if you are considering this type of sale you should contact me directly so I can provide you with more tailored assistance.
A short sale may only take place with the consent of the mortgage holder. For this, the seller needs to demonstrate four things:
1. That there are difficulties
2. The present value of your home is less than the amount owed plus closing costs.
3. That there is a buyer for the home who is not related to the seller in any way.
4. That there is no better alternative.
If these four conditions are met, there is a good chance that the short sale will be successful. However, keep in mind that short selling may not be the best option for everyone.
FHA Goverment Rules on Short Sales
FHA Loan standards for new advances observing a short deal might appear to be mind boggling – the guidelines that concern you frequently rely upon the situation with your home loan advance preceding the short deal. We have expounded on these guidelines previously, however since the distribution of the FHA Single Family Loan program handbook, HUD 4000.1, there have been many changes and updates to parts of FHA home credit strategy.
Yet again FHA has a rundown of short deal (otherwise called a “pre-abandonment deal) rules and guidelines in HUD 4000.1 for borrowers hoping to become mortgage holders. These principles start with the FHA characterizing what it views as a “short deal”:
“Pre-Foreclosure Sales, otherwise called Short Sales, allude to the deals of land that create continues that are not exactly the sum owed on the Property and the lien holders consent to deliver their liens and pardon the lack balance on the land.”
When is another FHA home advance conceivable after a short deal? As indicated by HUD 4000.1:
“The Mortgagee should report the section of a long time since the date of the Short Sale. Assuming the Short Sale happened inside three years of the case number task date, the Mortgage should be downsized to a Refer and physically guaranteed. This three-year time frame starts on the date of move of title by Short Sale in Illinois. FHA loan limits in Illinois are quite high for not high-cost areas, they are set at $420,680. For high cost counties they might be as high as $809,150.
There might be special cases for this standard, contingent upon a borrower’s conditions. One such situation? At the point when a borrower was current on the home loan and not delinquent at the hour of the short deal.
“A Borrower is viewed as qualified for another FHA-backed Mortgage if, from the date of case number task for the new Mortgage: all Mortgage Payments on the earlier Mortgage were made inside the month due for the year time frame going before the Short Sale; and installment obligation installments for a similar time-frame were likewise made inside the month due.”