Front Porch Realty Group has been extremely busy during these challenging economic times. We have provided sound, prudent counseling, guidance and service to many of our clients and referrals regarding Short Sales (the mortgage on the property is greater than the market or sale price). We have successfully represented Sellers and Buyers under these conditions and have negotiated favorably with financial institutions for an acceptable solution for all parties.
Yoko Kasai, REALTOR was interviewed and aired on AM 960 Green on March 12, 2011 - talking about Short Sales. To listen please click the link below. Interview is about 20 minutes.
Tea Time with Queen of the Loan..
Short Sales for Buyers
The Short Sale opportunity provides a potential Buyer with the distinct advantage of possibly acquiring a home below current market value. However, there are numerous aspects of a Short Sale that a potential Buyer must be aware of:
The term "short sale" is a misnomer in relation to time. Short Sales can be long and arduous
The Buyer's Realtor does not have 3rd Party Authorization to speak with the lien-holding bank so there is little control or input regarding the progress of the bank's Short Sale approval
The bank may not eventually approve the Short Sale based on the Seller's financial status or assets unrelated to the Short Sale property
From a Buyer's perspective, patience is a virtue. Front Porch Realty Group has participated in a Short Sale that took as little as 3 ½ months when representing the Seller and as long as 7 months when representing the Buyer
Please feel free to contact Front Porch Realty Group to discuss the opportunities that Short Sales present to you in today's current real estate market.
Short Sales for Sellers
If you are a Seller facing distress, there are some options for you. It is important to know the differences between a Short Sale and Foreclosure. Here are a few tips.
Short Sale vs. Foreclosure Homeowner Consequences
Successful Short Sale
A homeowner who successfully negotiates and closes a Short Sale will be eligible for a Fannie Mae backed mortgage after only 2 years. An investor who successfully negotiates and closes a Short Sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.
Only late payments on a mortgage will show on your Credit Score and after the sale, the mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A Short Sales's effect can be as brief as 12 to 18 months. A Short Sale is not reported on a credit history. There is no specific reporting item for "Short Sale". The loan is typically reported "paid in full, settled".
A Short Sale on its own does not challenge most security clearances nor is it reported on a credit report and is therefore not a challenge to employment.
Depending on the type of loan, some lenders who accept a Short Sale may be able to pursue a borrower for a deficiency judgment. In many successful Short Sales it is possible to convince the lender to give up this right as part of the Short Sale. In a properly managed Short Sale, the home is sold at a price that should be close to market value and in almost all cases will be better than a Foreclosure Sale which has worse credit repercussions to the Seller.
Foreclosure
A homeowner who loses a home to Foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years. An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years. On any future 1003 application, a prospective borrower will have to answer YES to question C in Section V111 of the standard 1003 that asks "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?" This will affect future borrowing rates.
Your score may be lowered anywhere from 250 to over 300 points. Typically your scores will be affected for over 3 years. Foreclosure will remain as a public record on a person's credit history for 10 years or more. Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. If a client has a Foreclosure and is a police officer, in the military, in the CIA, or any other position that requires a security clearance; in most cases clearance will be revoked and the position will be terminated. Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A Foreclosure may be ground for immediate reassignment or termination. Many employers are requiring credit checks on all job applicants. A Foreclosure is one of the most detrimental credit items an applicant can have and can challenge employment.
In a Foreclosure the home will have to go through an Real Estate Owned process if it does not sell at auction. In most cases this will result in a lower sales price and longer time to sell in a declining market. This will result in a higher possible deficiency judgment.
