Arun Patel, Realtor and Team | WATSON REALTY ERA

Quick Guide to Short Sales


Quick Guide to Short Sales

 

 

 

 

 

What is a short sale? A short sale is a sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan. This page offers some information about the basics of short sales and advice from Arun Patel & Team - Watson Realty ERA (California Department of Real Estate  License Number 01266780.)

 

 In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Neither side is "doing the other a favor;" a short sale is simply the most economical solution to a problem. Banks will incur a smaller financial loss than would result from foreclosure or continued non-payment. Borrowers are able to mitigate damage to their credit history, and partially control the debt. A short sale is typically faster and less expensive than a foreclosure. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.

 

 

 

 

 

 

 

 

 

Lenders often have loss mitigation departments that evaluate potential short sale transactions. The majority have pre-determined criteria for such transactions, but they may be open to offers, and their willingness varies. A bank will typically determine the amount of equity (or lack thereof), by determining the probable selling price from an appraisal or Broker Price Opinion (abbreviated BPO .)

Lenders may accept short sale offers or requests for short sales even if a Notice of Default has not been issued or recorded with the locality where the property is located. Given the unprecedented and overwhelming number of losses that mortgage lenders have suffered from mortgage failures that in part triggered the Financial crisis of 2007–2010, they are now more willing to accept short sales than ever before. For "under-water" borrowers who owe more on their mortgage than their property is worth and are having trouble selling, this presents an opportunity for them to avoid foreclosure as a result.

 

 

 

 

 

 

 

 

 

 

 

CNBC reported that some lenders have been accused of engaging in fraud during the short sale process. The fraud involves lenders in second position demanding kickbacks in the form of cash payments from the home buyer or real estate agent, and that are not disclosed anywhere on closing documents or HUD-1 statement. This is in violation of RESPA rules, which require disclosure of such payments.

CNBC - Big Banks Accused of Short Sale Fraud

US Department of Treasury - Tips for Avoiding Foreclosure Scams

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A successful short sale transaction requires experience, patience, and the ability to find solutions. As your Listing Agent, we will provide the following professional services:

Process
Fraud
Advice
  • Determine the requirements of your lender to approve your short sale. 
  • Facilitate the submission of all required documents from you to the lender.
  • Determine a listing price for your home, and marketing it for sale. 
  • Communicate with all parties to ensure a successful closing.

Arun Patel & Team at Watson Realty ERA, Bakersfield can provide you with FREE help to short sale your home in a timely manner and prevent foreclosure*.

Call, 661 859-5660, or email, ArunPatel@WatsonRealty.com, us today to discuss your real estate options.

 

*call for more details.

 

 

 

 

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