Blaine Loudenback FAQs

Frequently Asked Questions

What Is A Short Sale?

Why Do Homeowners and Lenders Want To Do Short Sales?

Should I Consider A Short Sale?

Why Would A Lender Agree To Accept A Short Sale?

Can I Qualify For A Short Sale, and If So, How?

What Hardships Do Lenders Accept?

What Is A Strategic Short Sale?

How Much Will I Pay In a Short Sale?

What Paperwork Should I Provide for a Short Sale?

How Can I Start the Short Sale Process?

Why Do I Need A Realtor?

Will The Lender Consider A Short Sale If The Mortgage Is Current?

Can I Do A Short Sale If I Have Two Loans?

Will You Handle Investment or Commercial Property As Well As Residential?

Can I Still Do A Short Sale If My Property Needs Repair?

How Does A Short Sale Affect My Credit?

Can Still I Do A Short Sale If There Are Liens On the Property?

What Are Short Sale Tax Consequences?

Can I Do A Short Sale If My House Is Already Listed?

Can I Do A Short Sale If I Have Filed For Bankruptcy?

Is There A Fee or Other Compensation For Short Sale Services?

Can I List My Home With You If I Am Not Doing A Short Sale?

Am I Obligated To Anything If I Fill Out the Form?

What is a Short Sale?

A short sale (http://en.wikipedia.org/wiki/Short_sale_%28real_estate%29) can also be known as a pre-foreclosure workout or a short payoff. It is an agreement between a lender and a homeowner for the lender to accept less than the amount owed on a home. The borrower is allowed to sell the property to a third party. With a short sale agreement, the lender does not hold the homeowner accountable for paying the balance of the mortgage. This helps the homeowner and the lender prevent an expensive foreclosure.

Short sales are an excellent way for both parties to win in a foreclosure situation. The homeowner avoids having a foreclosure on his or her credit record, while the lender avoids the expense and effort of the foreclosure process.

Why Do Homeowners and Lenders Want To Do A Short Sale?

A short sale can be a good choice for who are homeowners facing foreclosure (http://en.wikipedia.org/wiki/Foreclosure). A short sale not only allows the homeowner to sell the property to a third party but also removes the secured debt or mortgage from the home without holding the seller accountable for any difference in price. In other words, if a seller owes $500,000 on the home but it only sells for $450,000, the lender “forgives” the extra $50,000. The seller can then walk away from the sale without the residual payments owed to the bank and with significantly less credit report damage than typically occurs in a foreclosure.

Furthermore, there are no fees or upfront costs for the seller associated with a short sale. Instead, the lender agrees to pay the closing costs (http://www.zillow.com/mortgage-rates/buying-a-home/closing-costs/), including escrow fees, delinquent taxes and realtor commissions. This makes the short sale a much more financial feasible option for sellers than a traditional sale or a foreclosure.

In many cases, a short sale is the best possible option for a homeowner who has fallen behind on payments or who is struggling with lack of equity due to delinquency or shifting market values. Short sales offer homeowners who are struggling the chance to “reset” and get a fresh start on home ownership in a much shorter time than foreclosure.

Should I Consider A Short Sale?

Whether a short sale is the right course of action for you depends on several factors. The most common reason for a short sale is when a homeowner is unable to fulfill the payment obligations of a mortgage for various reasons. Many homeowners fall behind when mortgage payments increase due to an adjustable rate loan, when they suffer a job loss or when they go through some other family or financial emergency. This means that the homeowner is struggling to pay the bills while the lender is losing money as well.

It is hard sometimes to admit that you can no longer make your mortgage payments and are facing foreclosure. However, if you are suffering financial stress or if the value of your home is less than what you owe, it makes sense to consider a short sale as an option.

It may help to think of a short sale as a preventative action. If you save yourself from foreclosure, you preserve your credit rating and can soon try again with another home. On the other hand, if you ignore the problem and allow a foreclosure to happen, it may be years before you qualify for another mortgage.

A short sale serves two purposes. First, it saves you from a foreclosure that could ruin your credit history. Second, it releases you from a financial obligation that, for whatever reason, you can no longer afford.

Why Would A Lender Agree to Accept A Short Sale?

In the past, mortgage lenders may have been reluctant to give permission for a short sale, but that is not the case anymore. Lenders have so many homes on the books now that have been foreclosed on and still remain unsold that they are more than willing, in many cases, to work with borrowers to either refashion their current loans or agree to a short sale. The rule of thumb is that lenders would almost always prefer a short sale to a foreclosure.