Short Sale Solution
We Can Help You Avoid Foreclosure. We are not foreclosure consultants. Our expertise comes into play if and when a homeowner concludes that there is no realistic way to stop the foreclosure process or a loan modification is either not possible or not their best option. In fact, THERE IS A WAY to avoid foreclosure a
nd there are is a solid option–a short sale.
Why a Short Sale Can Be a Great Option. When the lender accepts a short sale, the homeowners avoid getting a foreclosure mark against their credit which is very important in repairing one’s future credit. Having a foreclosure on your credit is worse than a bankruptcy. It can take as little as one to two year after a bankruptcy to be eligible to purchase another home, whereas it takes as many as three to five or even seven years after a foreclosure.
What is a Short Sale? When a lender agrees to a short sale, it means that they agree to take less than the total amount owed on the mortgage and fees incurred. Most lenders are willing to consider a short sale in order to limit their expenses. They realize that in a foreclosure auction, a buyer has to come up with ALL CASH at the time of the sale, so the pool of buyers is very small and at many times, nonexistent.
If the home is not sold at auction, and 95% of these homes are not, then the lender’s legal fees and holding costs, additional preparation and oversight fees from the eventual sale of a property increase dramatically. Consequently, they are often very open to take a discounted payoff up front (a short sale). This is especially true for lenders who are in 2nd or 3rd positions because they realize that they will likely get nothing if the home goes to a foreclosure sale.
What Do We Need to Begin the Short Sale Process? We, The Short Sale Doctors, will do all the negotiations with your lender or lenders. To get the short sale underway, the lender will require the following items which we (or your Realtor) can help you with.
• Signed Loan Authorization Form which allows us to talk to your lenders about your loan.
• Most Recent Loan Statement from Each Lien Holder whichgives us all the needed information.
• Completed Financial Worksheet which acts as a summary of your budget.
• Last 2 Years Tax Returns. In particular, the first two pages of each return
• Last 2 Months Pay Stubs
• Last 2 Months Bank Statements if you have a bank account.
• Financial Hardship Letter. This is a one page handwritten summary of why you are behind on the loan and why you need this need the short sale alternative.
Two Issues to be Aware Of. Once the short sale is complete, the lender may pursue a deficiency judgment for the unpaid balance. We seek, however, to get lenders to waive this right and most are willing to do so.
Additionally, after the short sale, a lender will issue a 1099C because the IRS considers forgiven debt as income. Homeowners who have lived in the home as their personal residence for the last two out of five years will almost always avoid this tax. Most other people in this circumstance can file IRS form 982. If they are insolvent after the short sale, they will not have to pay taxes on the forgiven debt. Please obtain legal advice for how these matters may apply or not apply in your
situation.
Our First Priority is to Help Homeowners Avoid Foreclosure. To do this we work hard at getting your lender’s attention, submitting what amounts to 80-100 pages of documents (don’t worry, we’ll do most of the paperwork) and negotiating the sale. 80%+ of the time we are successful in negotiating the short sale with the lender(s) involved.
Although we can not guarantee the outcome, we can guarantee that we will work hard at being successful by presenting your lender with a professional packet of materials and persevering through what can be a long and frustrating process. Most lenders want to avoid foreclosure as much the homeowners. The important thing is to act quickly because it increases our flexibility for the best win/win outcome.
(541) 343-7073 or info@ShortSaleYourLender.com
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