Help Stop Foreclosure

Short Sale Foreclosures – A Win-Win Situation

Although the housing market is still reeling from the collapse of the mortgage industry, it cannot be said that all is lost. In fact, short sale foreclosures have become increasingly popular because they actually create a win-win situation for both buyers and sellers.

The Process

If you are not yet familiar with the concept of foreclosure, it is actually quite simple. A distressed homeowner, with an underwater mortgage, asks the lender to allow him to sell his home at an amount that is less than the mortgage balance. Usually, there is already a buyer who is interested in buying the pre-foreclosure property.

In this case, the lender requests for a hardship letter to establish the homeowner’s claim that he is no longer able to pay the monthly mortgage. In addition, other documentation that shows the planned selling price, loan balance and other expenses will be requested from the seller. Once the lender thinks that the request is justified, the proposed short sale will be approved.

For Sellers

The main reason why sellers go through the trouble is that they will be able to avoid foreclosure. This is important especially if you do not want your credit record blemished with such entry. Aside from this, the short sale also allows the seller to avoid the trauma that comes with having to go through a foreclosure process.

Since the short sale process can be a bit technical, it would help if you hire a local realtor who will make everything easier for you. Just make sure that the selling price includes the commission of your broker or agent.

For Buyers

As mentioned earlier, a lot of buyers are currently into investing in short sale foreclosures. Obviously, the main attraction is the savings that these foreclosed homes provide. Imagine, you will only have to basically pay the mortgage balance and you now have a home. Plus, the property is still being inhabited by the original owner and not yet dilapidated. You will be able to save on repair costs as well.

About the Author

Joseph B. Smith has been educating buyers on the finer points of Short Sale Foreclosures at ForeclosureDeals.com for over ten years. Contact Joseph B. Smith through ForeclosureDeals.com if you need help finding information about Short Sale Foreclosures.

Real Estate Short Sale, Foreclosure & Mortgage Marketing, Home Owner Hardship Letter

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Short Sale Success

As much as I would like to see short sales become a thing of the past there is some satisfaction in helping homeowners, who are having financial difficulties, avoid a foreclosure.  The Sacramento real estate market has been one of the hardest hit and unfortunately foreclosures and short sales are going to be with us for the foreseeable future.

Successfully completing a short sale certainly adds to the complexity of normal real estate transaction but the key to success is knowing what you are doing, having a process to handle them and experience in dealing with a variety of lenders.  At MagnumOne Realty we have had the opportunity to successfully complete a number of short sales and have a good handle on how to approach them.  We have developed a package for the homeowner that includes some basic documents we need to determine if the homeowner will be a successful short sale candidate, information our short sale team needs to get started quickly and some informative articles on what a short sale is, how they work, what will most likely be required and a general outline of how long it will take.

Getting started early is a key element in the successful short sale negotiations.  While the house is on the market we contact the lenders, provide them with the necessary authorizations and obtain their most up-to-date short sale requirements.  If they are a lender we have worked with before we talk with our contacts and let them know we would like to work directly with them again.  In addition we start working with the seller to develop a short sale package.  Because of our experience we can look at information provided by the homeowner and see questions the lender may ask and have those addressed so the first package we send is complete. 

Time is often not on our side when working with short sales.  We must have a complete package including an accepted offer prior to the home being foreclosed on.  Depending on when the homeowner hires us to help, this may be several months to weeks.  This means the marketing plan must be aggressive to attract a buyer.  Aggressive pricing will attract buyers but the sales price must be at or close to market as the first thing the lender will do is determine what current value is.   

An important element that too many Realtors are missing is that the home does not belong to the bank and it is the homeowner who negotiates with potential buyers.  This is exactly like any other sale with the only difference being that the contract is subject to lender approval as part of the short sale request.  Once the contract is accepted by the seller, it along with the short sale package and an estimated settlement sheet is sent to the lender.  We do not send multiple offers or send offers that come in later.  The potential buyer must be protected and their offer is the only one the bank will see unless the buyer withdraws.

Each lender is different and over time we have found that lenders change their process so it is important to maintain a steady dialog and use the contacts you have made over time to move the current short sale through the lenders organization.  Many of our Sacramento real estate clients have second and even third mortgages so we have to coordinate with the lenders and often negotiate between them to make sure each will release their lien.  We have found that most lenders are generally cooperative, understand the situation and will work with us to make the sale of the home a win for everyone concerned.  Occasionally we run into an overzealous negotiator who takes a position that won’t work for one or more of the other parties’ involved.  When this happens it often a good strategy to move the negotiation to the supervisor level or even get the homeowner to talk directly with the lender.

An important element in the short sale process that often goes overlooked is communication.  Not only between the short sale team and the lenders but with all the parties concerned.  Short sales take time, lenders are swamped and things you would think could be done quickly may take weeks.   During this time buyers can feel like they won’t get the house, seller’s start to think it would be easier to just let the bank foreclose and agents feel under pressure to get things done.  Frequent updates are vital to keep everyone up-to-date and focused on the sale and lender acceptance.

In conclusion, short sales are not easy for anyone but have a place in the current Sacramento real estate market.  They can be done successfully if the Realtor handling the short sale knows what they are doing, has a process to handle them effectively and has experience in dealing with a variety of lenders.

About the Author

Julie Jalone is a Sacramento real estate agent and owner of MagnumOne Realty in Roseville. She has extensive experience dealing with pre-foreclosure and helping clients avoid foreclosure through short sales. If you or someone you know is having difficulty making their monthly payment contact Julie at 916 276-6883 or send her an email at juliej@jalone.com. For more information see her website, www.jalone.com, which includes listings, home search, news, resources for buyers and sellers and her daily weblog, “Keep it Real in Sacramento.”

Why Agents Hate Short Sales?

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how to stop a foreclosure?

a foreclosure sale had been scheduled ……how do i stop the sale?

Filing for bankruptcy will halt the foreclosure sale temporarily.

The other option is try and talk to the lender and work out a loan restructuring plan. I would contact an attorney that specializes in loan modifications to approach the lender.

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The Key to Getting Your Pre-foreclosure/short Sale Listings Closed

“Following Up” is your key to short sale success! Following up on every aspect of your short sale is one of the most crucial parts of a short sale.  If there was one thing that, above all, needed to be done well in order to ensure success, it would be following up.  Because a short sale has several different pieces that all come together at various points in time, it follows that there are many people and parties to follow up with as you work through the process.

Who are you following up with?

When working on a short sale, there are three main parties that you are involved with: the lender(s), the homeowner, and the buyer’s real estate agent.  At different points throughout the short sale process, you may need to follow up with one, two, or all three of these parties at the same time.  In the beginning it will primarily be the homeowner, however as the short sale continues to move along, you’ll be following up more heavily with the lender and buyer’s agent to keep the buyer in the loop with the status of the short sale.

The Three Parties…
You will be in direct contact with the homeowner to obtain the documents to send to the lender and you’ll also need to be in touch with them when it comes time to drop the list price on their home as well as when it comes time to close on their property.  It is also very important to stay in contact with the homeowner to keep them updated on the status of the short sale negotiations.

The lender is the primary party that you’ll be following up on from the beginning to the end.  From the initial call right up through closing you’ll be on the phone with the lender, always following up on your most recent fax, email or phone call.  Depending on which lender it is that you’re dealing with, you may be following up with any number of different employees throughout the course of the short sale.  You may find yourself calling customer service representatives, loss mitigators, set-up representatives, managers or supervisors, and occasionally collections.

When trying to reach someone directly, always be alert to the possibility that the person you are trying to reach is not the correct person to be speaking to.  It is quite possible that you received some misinformation and have been trying to reach the wrong mitigator.  Remember, you are dealing with employees that could care less or perhaps are completely clueless.  There have been a few instances where I was given a name and told that that a particular person was the assigned loss mitigator.  After three weeks of leaving multiple messages, I hadn’t heard a peep from the “supposed” mitigator.  In need of a definitive update, I called the loss mitigation department and spoke to a different person who told me that the file had been assigned to someone else.

Be prepared to do that yourself.  If you go a couple of weeks without hearing back from the person in question, try calling and speaking to the department of which your designated party belongs  to and clarify the situation.  If you speak to someone different, chances are they will clear up some misinformation that you had received prior.  Keep digging, and you will get to the right person.  And while there are some important matters to attend to regarding the homeowner and real estate agent, the lender is who you’ll spend 80% of your follow up time with.

Another important party to follow up with is the buyer’s agent.  They need to be updated on a constant basis, and it will greatly benefit you if they are well versed in short sales, because then they will understand the nature of the situation they are involved in and be able to reassure their client to be patient.  The success of the short sale, and its 100% conclusion, is based largely on the buyer cooperating and sticking around, and so you’ll want to make sure that you set their expectations very clearly from the beginning!
How to keep everyone updated without having to make follow up calls every single day….
The best way I found to cut down having to make follow up calls every day is an online short sale management tool called managemyshortsale.com. This has taken a huge weight of my shoulders because it allows me to keep everyone in the loop on what the status of my short sale negotiations.  As soon as I speak to the foreclosing lender and I update the account it automatically sends an email notification to every party involved in the short sale process (Homeowner, Buyers Agent, Attorney, Mortgage Broker, etc).

View more articles about the preforeclosure industry and investing in real estate at http://www.realestatebusinessmentors.com

Visit www.AskBobLachance.com for any short sale bank negotiating questions.

About the Author

Before joining North Shore Enterprises (NSE) in 2004, Bob Lachance was a 4-year-collegiate-scholarship athlete in ice hockey at Boston University where he won a National Championship in 1995. After leaving BU he enjoyed a successful 8 year career as a professional hockey player. Upon retirement from hockey, Bob completed several profitable real estate rehab projects for his own benefit. He then joined NSE as an associate responsible for property acquisitions and loss mitigation/lender negotiations. Bob brought the same determination and work ethic that lead to great success in his professional sports career and thus generated more acquisitions and short sale acceptance letters in a shorter time frame than any associate before or since. His outstanding performance led to a promotion to partner in 2005. Since that time, Bob has taken responsibility for all the day to day operations of NSE. As partner, he has overseen the acquisition of, the loss mitigation, and the disposition of over four hundred properties. Bob continues to be directly responsible for identifying good candidates for acquisition and for overseeing bank negotiations, and has been essential to the success and growth of NSE.

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House going from Short Sale to Foreclosure?

The house my husband and I have the highest bid on is now going to foreclosure. We don’t know when. I guess we’re just suppose to keep checking.

You might be able to buy that house on the steps of your county courthouse, once the foreclosure auction happens.

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