This is a very common question asked all the time as far as what effect it will have, after doing short sale on your record will affect your credit score and credit report. Let us first understand what a short sale is before identifying its effect on our credit. A short sale happens when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of sale.
A short sale in general will affect your credit report less than a full foreclosure or deed in lieu of foreclosure. You can have a "settlement paid in full" negotiated with the lender, and obviously this will show better than simply doing nothing. No one may know exactly to perfection what the difference is in points on how your credit score would be affected whether you do a short sale vs. a foreclosure. Experts say that the damage that the foreclosure do to your credit is the same with what short sale on credit can do. This is because a short sale is part of the definition of foreclosure. For credit bureaus and lenders, this is a serious delinquency. If you are behind in payments and you owe too much on the house, what choices you really have anyways, if you do have any other choice, it is still better to choose for a short sale for various reasons. First, you can benefit from the proceeds even if it is not much. Another, you will be able to avail of a mortgage loan after two years, compare that to the five years you have to wait if your property is foreclosed. In addition, this helps the lenders too. Short sales can minimize the losses that the lenders will endure.
If you have lots of money, assets, reserves, and a high net worth and you just don’t feel like making payments or feel like paying down your principle balance, your lender won’t want to do a short sale. They will first want to get financial info from you, and a written hardship letter. This will make it quite clear to the bank that your only option is some help from the lender. This is where you see a seller that has a property listed on the MLS reading as "subject to bank approval". A full foreclosure can stay on your credit for up to 7 years. Freddie Mac recently passes some new laws for their company that would not allow some borrowers to finance a home for up to 5 years through them. This was more in the cases where people were just walking away, and didn’t have a true hardship case. Currently you can get a FHA loan where your last foreclosure was only 3 years ago. That’s how it is in the current market. You can always just go buy on a contract for deed, get into a rent to own, or rent a property while you are improving your credit. As a general rule you can still get loans with 30 day late payment on your record, it becomes less likely with a 60 day late, and very hard with 90 day late mortgage payment, etc.
It is better to consult your attorney and your accountant when you have to deal with selling your property in Short sale process. They can give you a good idea on how your credit score will be affected by doing a short sale.
For More Information Visit: - http://www.shortsalecredit.net
Wednesday, June 9, 2010
Wednesday, June 2, 2010
Learn the basics of short sale.
You may have heard that investing in short sales can be very profitable, but find yourself wondering what is short sale investing and how exactly it can benefit you If you want to move into short sales, it is important to keep both eyes open and consider all aspects of the business. So how exactly can you pull ahead and make the real profits when everyone else is fighting to do the same?
Using a short sale strategy, many times they are able to stop the foreclosure process through the multiple strategies short sale houses has available to them. Most short sale houses have cash buyers who will close in 10 days; this prevents a foreclosure from showing up on your record, prevents further damaging of your credit.
Once you learn the basics of buying a short sale home you'll find that taking advantage of these pre foreclosures is a great way to make money in real estate investing. It can be a confusing process to muddle through your first few times.
1) Find out the laws that pertain to foreclosures and short sales in your state.
2) Banks won't negotiate until in default.
3) Call loss and mitigation department. Speak to the person in charge of your default and keep in contact with this person once a week.
4) Ask for a short sale packet...sends the info, they ask for
5) You negotiate ONLY! Not your Realtor...you put the offer in and let the bank counter back, don’t let the Realtor control the listing.
6) Listing with a Realtor isn't always good but the bank will take you serious if it's on the…...pay the fee to list and mention it's a short sale!
7) Don’t expect any offers until a month before court....find out the laws in your state.
know your LAWS...in California non-judicial they can't come after you if you have a conventional loan...equity YES for the difference
8) PRIVATE sale is the best in California...try to short.
9) Most banks won't short sell because they have insurance with the mortgage companies and the insurance will cover theirs losses...that's why they reject loans but as the rates grow higher less want to carry the homes.
The key is to work with a real estate agent who specializes in the area of town you are looking in, and is connected to the short sale market. But be careful as many agents claim they know short sales, but few actually do.
Using a short sale strategy, many times they are able to stop the foreclosure process through the multiple strategies short sale houses has available to them. Most short sale houses have cash buyers who will close in 10 days; this prevents a foreclosure from showing up on your record, prevents further damaging of your credit.
Once you learn the basics of buying a short sale home you'll find that taking advantage of these pre foreclosures is a great way to make money in real estate investing. It can be a confusing process to muddle through your first few times.
1) Find out the laws that pertain to foreclosures and short sales in your state.
2) Banks won't negotiate until in default.
3) Call loss and mitigation department. Speak to the person in charge of your default and keep in contact with this person once a week.
4) Ask for a short sale packet...sends the info, they ask for
5) You negotiate ONLY! Not your Realtor...you put the offer in and let the bank counter back, don’t let the Realtor control the listing.
6) Listing with a Realtor isn't always good but the bank will take you serious if it's on the…...pay the fee to list and mention it's a short sale!
7) Don’t expect any offers until a month before court....find out the laws in your state.
know your LAWS...in California non-judicial they can't come after you if you have a conventional loan...equity YES for the difference
8) PRIVATE sale is the best in California...try to short.
9) Most banks won't short sell because they have insurance with the mortgage companies and the insurance will cover theirs losses...that's why they reject loans but as the rates grow higher less want to carry the homes.
The key is to work with a real estate agent who specializes in the area of town you are looking in, and is connected to the short sale market. But be careful as many agents claim they know short sales, but few actually do.
Sunday, May 23, 2010
THE SHORT SALE PROCESS
As we know short sale occurs when the lender agrees to discount a loan balance and accept less than the total amount due incident to the sale of a home due to financial hardship and I all ready discussed about short sales in my previous posts. So i will talk about the short sale process?
Short Sale Process: - Once homeowners find themselves in a circumstance where their home is worth less than the mortgage balance this is just the beginning of the process to be contacting the lender to see if the property qualifies for a short sale. If the owner/borrower has other assets which would enable them to pay off their mortgage, then the lender will not approve the short sale and could get a deficiency judgment against the homeowner for the difference of the amount owed on the loan and the sale price of the home. The first and most practical step would be to seek the assistance of a competent real estate short sale agent who should be specializes in bank short sales and the short sale process. While each lender has their own specific requirements there is a consistency in the nature and type of documentation that can be expected. Working with an experienced shortsalesafe.com is good move in getting your short sale approved with no deficiency judgment.
Hardship Statement is a written statement which describes for the lender what has changed making it difficult/impossible for the homeowners to continue paying their current mortgage, due to lost a job or had a significant decrease in income, was hospitalized or had some other unexpected illness or medical emergency contributing to their problems.
Statement of Income will require a hardship letter and proof of the financial statement outlining all liquid assets, including savings accounts, checking accounts, money market accounts, stocks, bonds, cash and other real estate. Obviously this statement needs to be consistent with the facts outlined in the hardship statement in order for a lender to seriously consider the request.
The advantage of a short sale is that the owner can save their home from foreclosure and their credit. The seller simply walks away at the closing not owing any money on their mortgage. Of course, they have lost their equity in the property by that time.
Short Sale Process: - Once homeowners find themselves in a circumstance where their home is worth less than the mortgage balance this is just the beginning of the process to be contacting the lender to see if the property qualifies for a short sale. If the owner/borrower has other assets which would enable them to pay off their mortgage, then the lender will not approve the short sale and could get a deficiency judgment against the homeowner for the difference of the amount owed on the loan and the sale price of the home. The first and most practical step would be to seek the assistance of a competent real estate short sale agent who should be specializes in bank short sales and the short sale process. While each lender has their own specific requirements there is a consistency in the nature and type of documentation that can be expected. Working with an experienced shortsalesafe.com is good move in getting your short sale approved with no deficiency judgment.
Hardship Statement is a written statement which describes for the lender what has changed making it difficult/impossible for the homeowners to continue paying their current mortgage, due to lost a job or had a significant decrease in income, was hospitalized or had some other unexpected illness or medical emergency contributing to their problems.
Statement of Income will require a hardship letter and proof of the financial statement outlining all liquid assets, including savings accounts, checking accounts, money market accounts, stocks, bonds, cash and other real estate. Obviously this statement needs to be consistent with the facts outlined in the hardship statement in order for a lender to seriously consider the request.
The advantage of a short sale is that the owner can save their home from foreclosure and their credit. The seller simply walks away at the closing not owing any money on their mortgage. Of course, they have lost their equity in the property by that time.
Friday, May 14, 2010
Avoid-foreclosure..... Do a short sale..!
Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks. While a short sale may sound appealing, it's important to understand what a short sale is, how it works and how it can affect your income and tax liability. If you do not understand the process, it could end up costing you a considerable amount of money. A short sale is a complex process, so it's best to work with a professional such as shortsalesafe.com.
If you are facing a debilitating adjustable rate mortgage interest rate increase, you are not alone. In fact, you are among the hundreds of thousands of residents who are in the same situation. If you are unable to continue paying your mortgage payments, you only have a few financial options available to resolve the situation for you and your family. You can attempt to negotiate for a loan modification, reducing your monthly financial obligation. In the event that you can still not make the mortgage payments, you can list your home for sale
A short sale is one of the many ways in which a home owner is able to prevent himself and his property from going into foreclosure. A short sale is a far less expensive process than a foreclosure and it also takes much less time to complete. Buyers of property in short sales will typically negotiate with lenders and lien holders to pay them the debt owed at discounted cost.
Therefore, if you are a buyer who plans to engage into a short sale, it would be wise to ask the opinion of a real estate short sale professional like us. We can provide you with a complete explanation of short sale and how the process works. In this way, you can be prepared to gather all the needed data to accomplish the transaction and move into your new house.
Monday, May 10, 2010
WHAT IS A SHORT SALE?
A 'Short Sale' is named based on 'shorting' a bank on the amount due on a given mortgage. Specifically, a short sale is when the bank lets a distressed homeowner, who owes more than his property is worth, settle up by paying less than the total owed.Generally, short sales are used when the homeowner is both behind on payments and owes more than the property is worth as a way to create equity for the investor so they will purchase an otherwise non-performing asset for the bank. Many homeowners have turned to real estate short sale as a way to avoid foreclosure, especially after having unsuccessfully tried other loss mitigation options such as loan modification. With a short sale, you may not get to keep your home, but you get to avoid foreclosure and the stress that comes with it.
Short sales are difficult to pull off, requiring negotiations with many layers of bureaucracy. Frequently, the bank you are sending your payments to is not the bank that owns your loan. In fact, it may have passed through the hands of two or more banks. Therefore, not every bank will agree to a short sale, and not many people are willing to buy short sale homes. That’s why it pays to work with professionals like shortsalesafe and we will make sure you take the right steps. After all, it’s not just your home at stake—it’s also about your financial future. With good planning and a dedicated team, you can sell short sale and get your mortgage cleared—and start rebuilding your finances right away.
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