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What
Is A Short Sale?
A Short
Sale is when you sell your home for less than the
balance remaining on your mortgage. If your mortgage
company agrees to a short sale, you can sell your home
and pay off all (or a portion of) your mortgage balance
with the proceeds. You may also be eligible for the
government’s Home Affordable Foreclosure Alternatives
Program (HAFA) which offers short sale and DIL options.
A short
sale is an alternative to foreclosure and may be an
option if:
-
You are ineligible to refinance or modify your
mortgage
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You are facing a long-term hardship
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You are behind on your mortgage payments
-
You owe more on your home than it’s worth
-
You have not been able to sell your home at a price
that covers what you still owe on your mortgage
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You can no longer afford your home and are ready or
need to leave
What are
the benefits of a Short Sale?
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Eliminate or reduce your mortgage debt
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Avoid the negative impact of a foreclosure
-
Start repairing your credit sooner than if you went
through a foreclosure
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May be able to get a Fannie Mae mortgage to purchase
a home sooner (in as little as 2 years) than if you
went through foreclosure (at least 7 years)
Is My
Bank Required to Accept a Short Sale?
-
Your lender is not required to agree to modify the
terms of your mortgage and may elect no to do so.
This includes modifying the payment or accepting a
short sale offer for less than you owe on the
property.
-
If possible, always make the mortgage payments as
agreed.
What is
the process for a Short Sale?
If you
qualify for this option, the process is similar to a
normal real estate sales transaction. You will work with
a real estate agent to market and sell your home.
However, your mortgage company will also be working with
you and your real estate agent every step of the way to:
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set
the sale price (based on current market value),
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collect financial information and negotiate with
other lien holders (i.e., your second mortgage
company) if applicable,
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review acceptable offers,
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agree to the terms of the sale once a buyer is in
place, and
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work
with the buyer’s real estate agent and mortgage
lender to finalize the sale.
In some
cases, you may be eligible to receive relocation
assistance to use toward your moving expenses and to
make the transition to new housing easier.
A Short
Sale may take up to 120 days, but this could be shorter
or longer depending upon your specific situation. If you
are unable to sell your home, you may be able to
transfer the ownership of your property to the owner of
your mortgage (also called a
Deed-in-Lieu of Foreclosure).
Vikki
Renfrow, Bob Beauregard, DiscoveryBayRealtors.com, or
Marples and Associates are not affiliated with any
government agency.
Your lender is not obligated to and may not agree to
alter the terms of your loan.
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