Facing a Foreclosure??

A foreclosure will affect your credit scores for 8 years and 200 pts.A Short Sale will affect your credit for 2 years and 100 pts.
Currently the capital loss on your personal property is not a taxable event.This is a good time to determine what you need to do before getting foreclosed upon. If you have received a Notice of Default (NOD) There is hope out there for you as a homeowner. A professional Realtor can help you to get all the information you need in these matters. As Realtors we have been faced with these issues for 3 years. As of late last year agents and brokers did not have the information regarding the different affects that occur from a
a foreclosure or a short sale. There is definitely an alternative to foreclosure.  

The Foreclosure Procedure
(5 events occur)

Event 1: Missing a Single Payment - The foreclo­sure procedure may begin when you miss a single monthly mortgage payment (delinquency). A lender or its servicing agent is required to contact the homeowner 30 days in advance of initiating foreclosure.

Event 2: Notice of Default (“NOD”) - The recording of the NOD officially begins the foreclosure proce­dure. You will receive a copy of the NOD by certified postage prepaid mail. After the NOD is recorded, an initial minimum three month period is required to provide you with the opportunity of curing the default and reinstating your mortgage loan.

DO NOT PAY ANY UP FRONT FEES AFTER THIS STAGE FOR HELP.

Event 3: End of the Initial Three Month Reinstatement or Cure Period - Your lender can schedule the fore­closure sale of your home.

Event 4: Notice of Sale (“NOS”) - The NOS is posted on your home and published in an authorized news­paper of general circulation in the jurisdiction where the foreclosure sale is to occur.

Event 5: Foreclosure Sale - When your home sells at the foreclosure sale, the lender may elect to accept the sale proceeds as payment in full.

Possible Alternatives or Options to Foreclosure

A. Modify or restructure the terms and payment schedule of your existing mortgage loan

B. Refinance

C. Pursue a “short sale”

D. Offer a “deed-in-lieu” of foreclosure to your lender

If You’ve Already Received a Notice of Default

Do not give up. The foreclosure process allows homeowners extra time to work with lenders to halt the procedure.

This means the seller or the sellers agent sells the home to a buyer at market, or slightly below market value, and the lender agrees to accept the proceeds as payment in full on the mortgage, even though the sales price is less than the existing encumbrances.

The downside is lenders are not required to negotiate discounted payoffs, and there is no guarantee your lender will let you do a short sale.

What Does An Approved Short Sale Mean?

Question: What Does An Approved Short Sale Mean?

A reader asks: "When I look at homes on Realtor.com, I see homes being advertised as an 'approved short sale.' Can you tell me why some of them say that and others don't? Plus, when I call the agents to get more information, they tell me to offer more than the asking price, and I don't know why. If it's an approved short sale, why would the seller want more money?"

Answer: Short sales are a complicated process, so I can totally understand your confusion. The wait for short sale approval can be very long, and sometimes buyers lose patience.

Another little quirk about short sales is the fact they are often priced under the comparable sales. Some agents list them low purposely to attract multiple offers. Therefore, the offer a bank accepts might be much higher than the list price because sellers often pick the highest priced offer.

Here is a quick overview of the short sale process:

What is an Approved Short Sale?

Banks generally do not approve a short sale until the bank receives an offer from a buyer. So, the usual way a short sale can be approved is for a buyer to submit an offer and get that offer approved. This is how a typical short sale goes:

Agent lists the short sale.

Seller delivers lender's required documents to the agent.

Buyer submits an offer subject to lender approval.

Seller signs the buyer's offer.

Listing agent sends the seller's package, the accepted offer and a HUD to the short sale bank.

Buyer waits anxiously, maybe for months.

Short sale approval letter is finally received by agent.

Agent calls the buyer's agent to deliver the news.

Buyer's agent informs listing agent that the buyer bought something else.

Buyer cancels the transaction.

Listing agent chokes the buyer's agent and puts the home back on the market as an approved short sale.

And that is typically how you get short sale approval.