Short Sales

Short Sales

When does foreclosure begin?

Lenders will initiate foreclosure proceedings when borrowers become delinquent in their mortgage obligations, usually after 3 missed payments . The lender will then notify the borrower in writing that he or she is in default. The lender can request a trustee’s sale or a judicial foreclosure, in which the property is to sell at public auction. After the notice is recorded, a borrower can cure the default by paying the overdue amount and pending payment. Usually, it is no later than a few days before the property’s sale.

Some sales allow the successful bidder to take possession of the property immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer. This allows the sheriff to come out and evict them. Borrowers should do everything they can to avoid foreclosure. It is one of the most damaging events that can occur in an individual’s credit history.

How long do bankruptcies and foreclosures stay on a credit report?

Bankruptcies and foreclosures can remain on a credit report for seven to ten years. Some lenders will consider a borrower earlier if they have re-established good credit. The circumstances surrounding the bankruptcy can also influence a lender’s decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If you went through a bankruptcy because you overextended personal credit lines, the lender will be less inclined to be flexible.

Can a home seller sell a home for less than its mortgage?

Yes! In some case you can sell your home for less than what you still owe on the mortgage. Just know it is complicated and depends on the lender. This situation is known as a “short sale”. A lender may be willing to split the difference between the sale price and loan amount. When the loan has been sold to the secondary market, a short sale can be more complicated. Then the lender will have to get permission from Freddie Mac, the two major secondary-market players. If the loan was a low-down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.

How does a home go into foreclosure?

Foreclosure proceedings usually begin after a borrower has skipped three mortgage payments. The lender will record a notice of default against the property. The lender will foreclose on the mortgage and proceed to set up a trustee sale, unless the debt is satisfied.

How does someone sell a slow mover?

Real estate experts say that price and condition are the two most important factors in selling a home. If you are selling in a slow market, your first step would be to lower your price. Check the house again to see if there are any cosmetic defects that you missed and if they can be repaired. Secondly, you need to make sure that the home is getting the exposure it deserves. This is through open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and the Internet. Another option is to pull your house off the market and wait for the market to improve.

Discuss a short sale or deed-in-lieu-of-foreclosure with your lender if there’s no equity and you need to sell due to certain financial considerations. A short sale is when the seller finds a buyer for a price that is below the mortgage amount. Then negotiates the difference with the lender. In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest, and in many cases most effective, option is to lower the price.

Questions? Get In Touch