STOP Foreclosure & Short Sales

In real estate, a short sale refers to the sale of a property in which the sale price is insufficient to pay off all encumbrances and pay the expenses of sale. If the lender is convinced that the owner, for various reasons, is unable to continue making the payments the lender will often agree to take less that the full amount owed to allow the sale to close escrow. The incentive for the bank to approve a short sale is to have the property sell before the loan becomes a problem account on their books.

This Process may be difficult to believe but it is a definite possibility. As stated below there are hoops to jump through. Banks are willing to allow individuals to assume the loan if they meet the required criteria. This is a system that works because the banks do not want to hold property for one but they also do not want to pay a fee (at times up to $25,000) in order to send the porperty through the foreclosure process.

Before a lender approves a short sale they will make two key decisions.

First, can the owner afford to continue making the payments on the property? If they can there is no reason for the bank to eat the loss. Banks will not look favorably upon a borrower that they determine lied to get the loan.

Second, will approving the short sale leave the bank in relatively the same position as they are likely to be in by going though the foreclosure process and then selling the property? If the bank can do significantly better by foreclosing they are likely to do so.

The seller must not receive any sale proceeds for themselves.

If there is a junior lienholder, the discounts can be substantial, sometimes as high as 90% or more. Question two is the primary determinant here. If the senior lender forecloses the junior may get nothing so they may take a deep discount to get something out of the property.

Short sale sellers need to be careful because there is no free lunch. The seller may end up with taxable income in the amount of the debt that is forgiven. The seller may also end up with adverse entries in their credit history. Any property owner considering a short sale needs to seek the advice of competent legal and tax advisors before entering into the transaction.

Our unique short sale program offers our clients the following:

1. Tax relief-No 1099
2. No deficiency judgment
3. No Promissory Note
4. Past Due Payments Erased
5. Credit Repair Program
6. Reduced Monthly Payments while addressing your loan situation.
7. No more harassing phone calls from banks.
8. No Foreclosure reported on your credit - shows as "Paid In Full"
9. Free relocation service.

For more details please call or e-mail Lazaro Gonzalez

HUD Pre-Foreclosure Sale Program

Homeowners who are in/have " defaulted " on their mortgages often attempt to sell their properties in order to avoid foreclosure and to protect their credit standing. However, because of declining property values areas, some homeowners cannot receive enough money from the sale to pay their mortgage balances. Here's were "short sale" are condsidered.

Therefore, the Department of Housing and Urban Development (HUD) has implemented the Pre-Foreclosure Sale Procedure / Short Sale. With some restrictions, homeowners who are permitted to engage in the PFS attempt to sell their homes for a fair market sale price, which can be less than the amount they owe to the lender. HUD then reimburses the lender for the difference between the sale proceeds and the outstanding mortgage indebtedness. This program applies to most applicants with loans insured by FHA and a few conventional loan lenders. Time is of the essence. Most applicants qualify.

Homeowners who sell their properties under this procedure will not only benefit by avoiding the effect of a foreclosure on their credit rating, but there are also provisions for cash consideration to those program participants who go to " closing " on the sale of their properties within a predetermined period of time.

You will be required to work with a real estate professional as Lazaro Gonzalez to improve your chances of accomplishing the sale / short sale. If, after a " good faith " effort, an acceptable purchase offer is not obtained within the allotted time, the lender will usually accept a deed-in-lieu of foreclosure. A deed-in-lieu is less desirable than a pre-foreclosure sale on a homeowner's credit record, but is looked upon more favorably than a foreclosure.

For more details and how to apply, please call or e-mail Lazaro Gonzalez

HUD Guide to avoiding Foreclosure  www.hud.gov/foreclosure

Option	How Does the Option Work?	Key Benefits
Repayment Plan	Distributes your delinquent payments over a period of time, usually no more than 10 months. A portion of the deferred delinquent amount is added to the normal monthly mortgage payment.	Brings your account up to date within a specified time-frame. With a goal in sight, you can move forward knowing that your mortgage loan is secure.
Loan Modification	A permanent change in one or more of the terms of the mortgage loan, allowing the loan to be reinstated to a "current" status, and resulting in a more affordable monthly mortgage loan payment. Past due interest and escrow are added to the new unpaid principal balance and re-amortized over the remaining life of the loan.	Changes the mortgage note itself, giving you a "fresh" start on managing your mortgage loan. Brings your account up to date immediately once the loan modification is executed.
Partial Claim (only for FHA loans)	A second mortgage, interest free, that is paid off at the time when the homeowner's loan is paid off. This option allows up to 12 months of past due accrued mortgage payments to be included in the second mortgage. Available only on FHA loans.	HUD loan is interest-free. Brings your account up to date immediately.
Fannie Mae HomeSaver Advance	A low interest rate loan provided by the first lien loan servicer to bring current a customer's delinquent first lien loan. The loan repaid over a 15 year term, with payment and interest accrual deferral during the first 6 months after the advance. Available only on most Fannie Mae loans.	Brings your account up to date immediately. Second mortgage is secured at a low interest rate.
Short Sale	Allows you to sell your home and use the proceeds to pay off the mortgage if you are unable to maintain payments, even if the home's market value is less than the total amount owed.	Avoids the lengthy legal process involved in foreclosure. Typically less damaging to your credit rating than foreclosure.
Deed in Lieu of Foreclosure	Allows you to voluntarily transfer legal ownership of your property to your investor if you are unable to maintain mortgage payments and cannot sell the home at current market value.	Avoids the lengthy legal process involved in foreclosure. May be less damaging to your credit rating than foreclosure.