Short Sales - April Bolanos

Short Sales Made Easy

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers.

In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Neither side is "doing the other a favor;" a short sale is simply the most economical solution to a problem. Banks will incur a smaller financial loss than foreclosure or continued non-payment would entail. Borrowers are able to mitigate damage to their credit history, and partially control the debt. A short sale is typically faster and less expensive than a foreclosure. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.

On November 30th 2009, The U.S. Treasury Department announced new guidelines set on a plan to streamline the short sale process for mortgage companies to speed "short sales" of homes. The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, according to an announcement on the Treasury's website.

The program will standardize the process, documentation and short performance timeframes. Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012.

The real estate market in Lee County is volatile, especially lately, and it takes an experienced professional to move your house quickly, and professionally.

When you’ve decided to sell, I will be your advocate, your guide, and your fierce negotiator. I will work hard to make yours a great sale.

I look forward to it.

Sincerely,
April

Short Sales Made Easy

Paramount Home Realty Group, Inc