What is a Foreclosure?
What is a Short Sale?
Is a Short Sale right for me and my situation?
Can I still short sale my home even if I have 2 loans?
Can I still do a short sale even if the property is in very bad condition?
Who benefits from the Short Sale?
How much will the short sale cost me?
Is a Short Sale a win –win for everyone?
Will A Short Sale Destroy My Credit?
Will the lender approve a Short Sale even if the homeowner is current on their mortgage?
Why would a mortgage company agree to accept a short sale?
Why not just let my lender foreclose?
Why would banks forgive the difference?>
Will the bank come after the homeowner for the difference?
What sort of hardship would my lender consider legitimate?
This sounds too good to be true!?
Why does my property have negative equity?
What is Negative Equity?
What if I owe what my home is worth?
What if I'm not behind on my payments?
What if my home is already in foreclosure?
Will the home owner’s credit be affected?
How long do bankruptcies and foreclosures stay on a credit report?
Why Do I Have To Provide Personal Information?
How Long Will This Take?
Why Should I accept Such a Low Offer on My Property?
Will I Get Any Money From The Sale?
I Heard the IRS will 1099 me for the Amount Of Debt Forgiven.

 

What is a Foreclosure?      back to top

When a home owner has not been making the mortgage payments, and it’s the action the financial institution can use to take the house back. The home owner borrowed money using the house as collateral with the agreement that if they could not pay it back, then the lender could take the house.

What is a Short Sale?      back to top

A short sale is when the lender will accept less than the full amount due on a mortgage when a property is sold. Usually, the lender will accept the short sale to avoid the time and expense of a foreclosure. Financially the lender is actually ahead after a short sale.

Is a Short Sale right for me and my situation?      back to top

Mortgage lenders are increasingly willing to work with borrowers faced with a financial hardship to accept a discounted payoff on a mortgage. If you are faced with a hardship, and are unable to meet your obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through foreclosure.

As you consider the option of pursuing a short sale, remember your lender is looking to limit any potential loss on your loan. By completing a short sale, your lender has arrived at a solution that is, for them, much better than a costly foreclosure.

Can I still short sale my home even if I have 2 loans?      back to top

Yes, it doesn’t matter how much you owe. The lender will evaluate what the current market value is and then decide how much they will accept.

Can I still do a short sale even if the property is in very bad condition?      back to top

Yes. Lenders are more motivated to do a short sale on a property that needs work than on a property that doesn’t. Lenders know losses start to skyrocket when they foreclose on a property that needs a lot of repair work. Lenders are in the business of lending money not property management and home repairs.

Who benefits from the Short Sale?      back to top
Short sales are a win-win situation. Lenders, Mortgagees and Realtors all benefit from the successful short sale. Mortgagors get the majority of their money back, Mortgagees get the relief they need and are able to sell their property and avoid foreclosure, and Realtors can facilitate the transaction and receive compensation (commission) from the sale of the property.

How much will the short sale cost me?      back to top
We charge NO fee’s to either the Realtor or Home owner.

Is a Short Sale a win –win for everyone?      back to top

Well, the Lender is relatively happy, because they have resolved the bad loan and kept down their loss. The Buyer is happy, because he bought the property for less than someone else paid for it. The Realtor is happy, because he earned a commission. The Seller is happy, because he has saved his credit and kept a foreclosure off of his record.

Will A Short Sale Destroy My Credit?      back to top

Yes and no. The short sale may not show up on your credit. In fact, most mortgage trade lines report “Mortgage Paid” after a short sale. Any late payment history will still appear, as will any Notice of Default filings. What won’t report is an actual foreclosure. In today’s credit market, a foreclosure may prevent you from obtaining a mortgage for at least 5 years, longer than a bankruptcy.

Will the lender approve a Short Sale even if the homeowner is current on their mortgage?      back to top

Yes we have successfully negotiated and received an approval on a short sale even when the homeowner was current on their payments.

Why would a mortgage company agree to accept a short sale?      back to top

There are several reasons why a mortgage company would approve a short sale payoff, including the following: Legal Concerns, Asset management Expenses and Reserve Requirements.

Delinquent and non-performing loans place another burden on mortgage lenders. For all delinquent and non-performing loans lenders must set aside funds in reserve to deal with potential losses. These funds cannot be put to work generating new loan fees until the bad loans are resolved. A successful short sale lets the lender put their money back to work.

Why not just let my lender foreclose?      back to top
NO! What is the first thing banks do when they foreclose on a property? Hand it over to a real estate agent to get rid of it quick! The foreclosure process is a legal process. It involves attorneys and it costs MONEY. Once they get the property back via foreclosure they must often sell it for MUCH LESS than market value and pay Realtor commissions and all customary closing costs. Doesn’t it make more sense for them to take at or a little below fair market value before foreclosing?

And, even when they do sell it through foreclosure... this does NOT remove your obligation to repay the remaining balance! It is not wiped away!!!

Why would banks forgive the difference?      back to top
To mitigate their losses, banks often accept a settlement of less than what is owed on the property. When faced with the option of getting the property ‘back’ through foreclosure, a short sale often makes a much wiser business decision for the bank.

Will the bank come after the homeowner for the difference?      back to top

Quantex will always negotiate with lenders to “Not seek a deficiency judgment” against the homeowner.

What sort of hardship would my lender consider legitimate?      back to top

To some extent, that will depend upon the mortgage company considering the short sale request. Generally, as long as the hardship is real and the mortgage company believes the loan is likely to become delinquent as a result, the short sale request will be processed by the Loss Mitigation Department. A big key to getting Loss Mitigation to accept a hardship is to submit a strong hardship letter. The hardship letter sets the tone for the entire file.

Acceptable Homeowner Hardships

• Death or Illness of a borrower
• Death or Illness of a borrowers family member
• Divorce
• Job loss
• Excessive obligations - same income, including habitual non-payment of debts
• Abandonment of property
• Employment transfer
• Neighborhood problem
• Property problem
• Unable to rent or sell property
• Military service
• Loss of income due to layoff
• Medical reasons
• One-time repairs (home, auto, etc.)
• Temporary loss of income

Unacceptable Reasons

• Quitting a job
• Leaving a job to stay at home and care for children
• Voluntary reduction in hours worked, reducing pay
• Seasonal layoff from a job
• Quitting a job to go back to school
• Just because you no longer want the property

This sounds too good to be true!?      back to top
Not really. Things that are ‘too good to be true’ usually don’t make good economic sense. The short sale makes good common and financial sense for the banks who grant them. The fact of the matter is, Mortgage companies and banks are NOT in the real estate business. They are in the LENDING business. The last thing they want is that property back.

Why does my property have negative equity?
Here are a few common reasons:      back to top

• Person bought at the height of the market and the market has now declined or paid more than the property was worth.
• The area has become less desirable for any number of reasons, so property values have declined.
• Person purchased the home with little or no money down and wants to sell within a few years of purchase… and the property value has not increased during that time. Therefore, costs associated with selling the property may create a balance due at closing
• Person refinanced the home (with a high appraisal value) and now has little or no equity.
• Person bought in a brand new subdivision or recently developed area that has not been fully developed or has not appreciated (or has depreciated) in value
• The market is soft because there is too much builder (new home) inventory or too many existing homes on the market (buyer’s market)

What is Negative Equity?      back to top
Also known as being "upside down" negative equity is the difference between the value of an asset and the outstanding portion of the loan taken out to pay for the asset, when the latter exceeds the former. Negative equity can result from a decline in the value of an asset after it is purchased.

Some areas decline in value. In other areas, prices may remain flat so that the properties in that area do not appreciate. If a seller wants to sell within 2-3 years of purchasing their property, they may be in a situation where they have negative equity.

What if I owe what my home is worth?      back to top
Even if you owe exactly what your home is worth, you may still need to do a short sale in order to pay for the costs of the sale (Realtor fees, Title Policy and other seller closing costs).

What if I'm not behind on my payments?      back to top
Short sales work – even if you’ve never missed a payment! Yes, I know… short sales have gotten a stigma of being only available for folks who are in foreclosure. But I have successfully negotiated dozens of short sales for folks who have never missed a mortgage payment! They just happen to be in a negative equity position and need the short sale in order to sell their home.

What if my home is already in foreclosure?
Your foreclosure sale will usually be suspended during the short sale process. That's why it's imperative that you contact me right away!!!

Will the home owner’s credit be affected?      back to top

If the homeowner has to short sale their home they’ve most likely missed payments already. That in itself has already adversely affected their credit. The key here is to stop the devastating effect on your credit that a Foreclosure causes. A Foreclosure is the most damaging record on your credit report – it’s even worse than bankruptcy.

How long do bankruptcies and foreclosures stay on a credit report?      back to top
Bankruptcies and foreclosures can remain on a credit report for seven to 10 years. Some lenders will consider a borrower earlier if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision.
For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.

Why Do I Have To Provide Personal Information?      back to top

All lenders require a complete short sale package, including tax returns, bank statements, pay stubs, etc, to show that there is a genuine hardship or the need to sell.

How Long Will This Take?      back to top

This is totally up to the lender. Some lenders take as little as 3 - 4 weeks, some 6 - 12 months (or more). The only way to know is to start the process. The key is making sure that your short sale package is complete, and that you follow up daily with the lender.

Why Should I accept Such a Low Offer on My Property?      back to top

What difference does it make? To sell quickly, you must list the property at or below current market value, not what you wish you could sell for, or what you think the property should be worth.

Will I Get Any Money From The Sale?      back to top

No. Lenders will not allow a borrower to receive any money. If the lender thinks you are getting paid from the sale, they will immediately kill the deal.

I Heard the IRS will 1099 me for the Amount Of Debt Forgiven.      back to top

The Mortgage Relief Debt Act of 2007 does not permit lenders to issue a 1099 to a borrower for a deficiency balance on a primary residence.