Archive for the ‘Questions and Answers’ Category

Question by vee_ann84: What does it mean if a house is listed as “possible short sale“?
We are looking for a house and there is one we want to look at, but on the web listing it says “possible short sale“. What would this mean if we wanted to buy it??

Best answer:

Answer by MadMan
It means that it will take a lot longer for the sale to go through as the mortgage lender has to approve thew sale as well as the owner. This is because the sale price will not cover the mortgage and the lender will lose money on the sale.

Add your own answer in the comments!

What is a “Short Sale”? why call it a “short sale” when it takes to long to sell a property?
Why call it a “short sale” when it takes forever to process a sale of the property? who benefits from it?

Best answer:

Answer by ShortSaleBroker!

It is called a “short sale” because the property is being sold “short” of what is owed on it.  It is a no win situation for most as both the lender and the seller have negatives.  The lender has to take a loss on money they actually lent out and the seller has to take a negative hit on their credit.

It is, however, MUCH better than a foreclosure.

What is a short sale and is it something I should consider?

That is a question that I get a lot from sellers looking for short sale information.  I tell them the basic definition of a short sale “A property that is sold ’short’ of what is owed on it.”.  The chief issue being whether or not the lenders involved will accept the this transaction or seek to pursue an alternate remedy to the situation (like foreclosure or going to court for a monetary judgement).

The best thing to do is ask questions.  Ask your real estate agent, ask your accountant, ask your lawyer, ask your banker and finally ask yourself if this is something that you need to do.  This site (www.HomeAndPropertySolutions.com) is a great resource to find answers on and to get a whole bunch of short sale information.  A perfect place to start answering that question and when you are set to move forward, it is a great place to find an agent who is an expert in this area (no matter where you live in the US).

Browse around, use the search and remember that you can never ask too many questions when it comes to doing a short sale and how it will affect your credit and ability to purchase in the future.

I hope this helps!

HAFA is a government-subsidized Home Affordable Foreclosure Alternatives program for distressed homeowners to sell their homes to avoid foreclosure, even if the sales price is not enough to pay off their existing mortgage loans. Under HAFA, a participating lender will pre-approve the terms of a short sale and give the borrower at least 4 months to market and sell the property using a licensed real estate professional.

The eligibility requirements for a HAFA short sale include the following:

• Property must be borrower’s principal residence;

• Loan must be a first trust deed originated before 2009;

• Loan must be delinquent or default must be reasonably foreseeable;

• Current unpaid principal balance must be $729,750 or less for single-family home (or higher amounts for 2-to-4 units); and

• Borrower must be eligible for, but unable to complete, a loan modification under the Home Affordable Modification Program (HAMP).

The government incentives under HAFA are as follows:

• $1,500 to borrower for relocation expenses;

• $1,000 to servicer for each successful short sale; and
$1 to investor for every $2 paid to extinguish junior liens, up to $1,000 maximum.

Dates Effective:  April 5, 2010 to Dec. 31, 2012.

For more information and to see if you can qualify for this program, fill out the Confidential Property Analysis form on this site or give us a call or email and we can help.

-J

The home that we are renting is being put up for a short sales. I know that they are currently trying to get potential buyers the will be talking to the bank. Our Landlord says that we should be fine until March or maybe even June and was told that once the sale does go through we will be given 45 days notice. Should we start now and look for another place or just slowly look or just wait unitl the bank and owner agree to a sale and it all goes through?

I want to short sale an investment property. the difference between what is owed, and actual value is signifigent, and will lead to bankruptcy.

if we recieve an offer from a potential buyer, can i counter it back to say “subject to: bank not issuing 1099 for the difference”?

FYI – the bank is WAMU.

I have put an offer for a short sale property and the seller will be signing the contract soon. Once this is done what has to be done next.

Can someone put in steps

I recently got this question from a client of mine that was in this very situation.  House upside down with a loan to value difference close to $100k and wanted to avoid a foreclosure.  We got her house listed, and got a full priced buyer.  The bank approved the short sale (and a check to the seller at close as well BTW) and everything was set to go.  Then the question came up.  How will this affect my SSI payment?

No one I talked to knew this answer so I got on the phone with the good old US government and the nice people at the Social Security Department and guess what?  It turns out that a short sale has no affect on regular social security payment, HOWEVER, IT DOES AFFECT SSI.  As a matter of fact, in the year that the 1099-c is issued for the forgiven debt (even though there is no ACTUAL income and it is exempt from federal tax consequences on an owner occupied home), it will count against them for SSI eligibility in regards to the financial limits required to qualify.  What does that mean?

Well it means no short sale for this client and welcome to one more foreclosure in America.

My rental home value has decreased by 50% and I cannot get it sold. My fiancee name is on the deed but not on the mortgage loan. Can I short sale it to her without any complications?

I’m pre approved for the Veterans home loan through my bank. I really like this short sale house but my realtor told me “Doing a VA loan with a short sale in our present market environment is quite difficult.” Is he just being lazy or are their some strings attached with the VA home loan that I can’t do a short sale. Thanks in advance for responding.