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What is a Short Sale?
If you just cannot keep up with your mortgage payments due to a loss or financial hardship, you may want to consider a short sale rather than foreclosing or filing a bankruptcy.
If you owe more on your mortgage than your home is worth, the debt you owe to the bank can be forgiven through a short sale. Meaning you don’t have to pay it back if you qualify. To obtain a short sale in California, you must use a licensed real estate agent or brokerage. This must be someone who has experience and knowledge in short sale negotiations. If you didn’t know, the lender most of the time pays all the fees that are normally associated with selling a property. That’s right you don’t have to pay for backed up payments or taxes. When your property is sold, and while the short sale process is occurring you can stay in your home. There are many benefits to short selling. Allow me to guide you through this tough difficult time.
As a Realtor and Short Sale expert, I am able to provide advice to those who are facing mortgage difficulties. As a real estate professional, I will explain what your options are so that you can be able to make an informed decision. With your permission, I will communicate directly with the mortgage company on your behalf. When we talk for the first time, it is my goal to provide you the information so that you can consider what options are available to keep your home before moving forward with a HAFA or traditional short sale.
The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers who utilize a short sale to avoid foreclosures. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale.
There is light at the end of the tunnel.
Take a look below.
Foreclosure vs. Short Sale
If you loose a home to foreclosure, you will be ineligible for a Fannie Mae backed mortgage for a period of 5 years. In other words, you will not be able to qualify for a home loan for minimum 5 years from the date you foreclosed.
If you successfully sell your home prior to foreclosing by hiring a listing agent like me, who will negotiate a short sale with your lender, you will be eligible for a Fannie Mae backed mortgage after only 2 years. 2 years goes by fast. After 2 years you can qualify as a first time home buyer again.
An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years.
An investor who successfully sells their home prior to foreclosing by hiring a listing agent and negotiating a short sale with their lender, will be eligible for a Fannie Mae backed mortgage after only 2 years. 2 years goes by fast.
When you foreclose your credit score may be lowered anywhere from 250 to more than 300 points. Typically, this will affect a score for more than 3 years.
Only late payments on a mortgage will show on your credit report. An “after-sale” mortgage will be reported as paid or negotiated. This will still lower the score but only as little as 50 points if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months, and there are companies that can hired to help improve credit scores by removing delinquent items off of credit reports.
Foreclosure will remain as a public record on a person’s credit history for at least 7-10 years.
A short sale is not reported on credit history. There is no specific reporting item for a “short sale.” The loan is typically reported “paid in full, settled or paid less than full amount.”
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