Know the Steps to Closing a Short Sale

There is a way to escape foreclosure that’s getting a little easier to go through. It’s called a short sale and homeowners who are in distress can use it to sell their homes. It is a bit unpleasant because it means selling a home for less than the amount of the mortgage, with the loan balance that remains being forgiven by the mortgage lender.

However, as the economic crisis kept growing, short sales became much more difficult to get through. People, especially those with second mortgages and home equity loans, found that holders of the second mortgage would often be reluctant to do a short sale because they were afraid that they would not get their piece of the pie after the first mortgage was paid off.

Once the U.S. Treasury Department announced details on the Expansion of the Making Home Affordable program, which included short sales, lenders have been a little more willing to cooperate. The plan includes standardized paperwork, cash incentives to lenders, cash for sellers to recover closing costs, allowing 90 days to 1 year to sell the property and no foreclosure during this period, among others.

Although the process is unpleasant (selling a home under less than favorable conditions usually is), it is one way that you can avoid foreclosure if you are one of the many homeowners that is under distress because of the crisis suffered by the U.S. economy. Therefore, if you are facing foreclosure and do not know where to turn, this may be an option for you.

Some of the things that you should consider if you are planning to do a short sale are the following:

Obtain legal advice-You should be as informed as possible on any legalities involved.

Call an accountant -There are repercussions when you are dealing with a short sale and you need to be fully aware of what they are.

Involve the bank early-You will need your lender’s cooperation if you are going to do a short sale. The earlier you involve your lender in the process, the easier things might be.

Have someone represent you-Unless you are a real estate professional, involve a scrupulous agent in the process who will help you as much as possible.

Talk to your mortgage lender-Openly discuss the losses the mortgage lender will incur. If you are open to your lender, your lender may be more open to you.

You should have a letter of authorization-Lenders are reluctant to discuss personal information unless you authorize them to do so.

Include a Hardship letter-You will want to talk about how you got into your financial bind and request that the lender accept less than what is owed to the institution. Do not over-do it on a story that’s overly tragic and sad, but do not omit those details either. Keep it truthful, balanced and accurate so that you do not sound as if you are trying to pull the wool over their eyes.

In any event. Those are just some of the things that you should include if you are going to try to do a short sale. You will also have to disclose income and assets, bank statements, a comparative market analysis and other things, which is why it is so important to include the lender and professionals early on in the process. If you do, you are more likely to succeed.

Immobilienmakler Heidelberg

Makler Heidelberg

Source by Marco D Benavides

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