With the downturn of the economy, many Orange County homeowners are finding themselves overwhelmed with their mortgage responsibilities. Many more have fallen behind in payments and are awaiting imminent foreclosure proceedings. Homeowners have options including loan modification, deed-in-lieu, and short sales. Many Orange County residents have tried the loan modification route and become frustrated. Rather than foreclose on the home, they’ve decided to pursue an idea they’ve heard about called a short sale. We have extensive experience with short sales in Orange County and will answer any questions you may have below.
1. What is a short sale?
When your lender releases the lien they have on your home for less than is owed in order for you to sell it to a new buyer.
2. What are the choices for a homeowner having trouble making payments?
Homeowners have many options including: Making Home Affordable Plan, deed-in-lieu, foreclosure, bankruptcy, and short sale to name a few
3. Why would I choose a short sale?
-You may be able to buy another home with Fannie Mae in as little as 2 years
-You may be able to buy another home right away if you haven’t missed any payments
-You may feel better about “doing something to help” rather than just walking away, letting it go to foreclosure
-The banks have become more accommodating of short sales recently as their main foreclosure avoidance tool
-On average, foreclosure will usually cost the bank about $50,000 to conduct
-If there are two mortgages, a deed-in-lieu will usually not be possible
-Treasury Dept will pay lender $1,000 to do a short sale and up to another $1,000 junior lien holders
-If homeowner can’t do a HAMP loan modification but were eligible, they may be credited $1,500
-CA is a non deficiency judgement state, meaning the bank can’t put a personal judgement against you for the unpaid balance in the short sale
-Mortgage Forgiveness Debt Relief Act of 2007 may be extended, which eliminates forgiven debt as taxable income
-IRS website claims that if you are insolvent at time of debt cancellation, you may not be liable for any taxes on forgiven unpaid balance fall.
If I decide to pursue a short sale, why would I choose you?
-We will listen to your needs and communicate them to the bank
-We understand the process and what is generally expected in order to have a successful completion
-We are skilled at negotiating on the borrowers behalf to get you the best possible deal
-We will advise you on avoiding common pitfalls in the short sale process
-We are trained with real world short sale negotiation experience
-We dedicate all of our time only to clients that are highly motivated to be successful, even if that means less clients for us
-We generally don’t need to involve the expensive services of an attorney
-We can recommend a trusted attorney if a more complicated situation warrants one
-We can advise you on HAFA, cash for keys, relocation expense reimbursement, etc
-We will advise you on promissory notes, cash contributions, and deficiency waivers
-We’ll find a buyer and get the home in escrow, usually with very few/if any open houses
-We’ll negotiate through the escrow process and any cash contributions and promissory notes
-We’ll help you find a new place to live, even if its just a small rental
-You won’t need to pay us a dime for all of this, in fact, it would probably be illegal for you to pay us anything