You also have to include a hardship letter, in this you really wanted detail the hardships that you have faith and are facing and why the bank should agree to a short sale versus taking a gamble on whether or not you’ll be able to make good on this note sometime down the line. Be sure to include all mitigating factors such as lost your job you got sick were in the hospital anything that may affect your abilities or may have affected your abilities to earn a living that would help pay off his mortgage.

Statement of income and assets, here you want to be truthful and straightforward detailing to the lender will of your accounts savings checking in any other assets you may have that they will look at before agreeing to a short sale. Proof of income or the lack thereof, again it’s best to be truthful and straightforward they will be able to obtain filings that your employers may have made and it’s best to have that information up front rather than to find out once you’re deep in the process that the process has been declined because they discovered something that you did not disclose.

Current market comparisons, it’s best to include a competitive market analysis markets decline properties decline all calls in home values drop this can be part of the reason why you can’t simply sell your home and pay off the lender you’ll need to substantiate this claim via a comparative market analysis he qualified real estate agent can compare your comparative market analysis which basically shows prices for similar homes in your area, this will include homes that are active on the market, pending sales, and homes that have been sold in the last six months.

Home forclosure shortsale

If everything checks out the lender theoretically should approve your short sale as part of the agreement you should ask your lender not to report this transaction negatively on your credit, while this is a standard request the lending institution is under no obligation to comply unless they explicitly agree to.

Access loss mitigation has performed numerous home short sales, we have in effect reversed the foreclosure process and pre-foreclosed on the lending institutions on behalf of the homeowners by utilizing the short sales process. We would be more than happy to provide a absolutely free no obligation consultation.

The Lowdown on short sales

Part 1

There are many ways to lose a home such as bankruptcy foreclosure proceedings where you would watch your home be auctioned off and the sheriffs come and physically remove you and your belongings from your home all of which are extremely unpleasant to say the least. Not to mention destroying your own credit having to deal with loss of dignity embarrassment and the fact that you are now homeless.

Over the last couple of years short sales have become extremely common. What is a short, and should I consider it. A short sale at its essence is the lender is agreeing to accept less than the current amount that you owe. Short sales are essentially a reduced pay off by either you or a third party, there are times that the lender will not accept a short sale if it makes sense for them to actually foreclose on you. What about if the situation arises where you don’t have the money to pay off the reduced amount, there are situations where a third-party may put up the money on your behalf in various arrangements, whatever you do make sure that you consult with a qualified professional before making any commitments, always obtain legal advice from a competent real estate attorney, contact your accountant to discuss short sale tax ramifications,

or contact a shortsales specialist at accesslossmitigation.com.

Home Short Sale

The first thing you can do when researching a short sale would be to call the lender (more…)

Although other dimensions of the economy have been seeing some turnaround in recent months, unemployment is still at record highs. This means that federal regulators have been trying even harder to mitigate the effects of those job losses and prevent another big cycle of home foreclosures and short sales.

The Federal Deposit Insurance Corporation protects the deposits of consumers in the event that a bank fails, and has been doing so for decades. In this day and age, there is no reason to fear that a bank will lose your money. The organization has recently said that banks and other lenders should try to give certain qualified borrowers a ‘temporary respite’ from their monthly mortgage payments. This is known as a forebearance, and can last up to six months, especially if the mortgage holders are trying to work out a loan modification.

The agency has released a plan to lower loan payments to lower levels for borrowers to have defaulted, but only those who can prove that they only defaulted because of job loss or involuntary salary reductions. The FDIC chairwoman has released statements saying that they’re making these announcements, not just to save money and mitigate losses, but because it’s the right thing to do. They’re trying to keep families in their houses and keep the economy going strong.

Recently, the U.S. Department of Housing and Urban Development (HUD) has passed new guidelines allowing FHA borrowers to seek to cut down their monthly payments on their mortgage through a Making Home Affordable loan modification program starting August 15^th.

Before this, homeowners struggling to make their payments on an FHA-backed mortgage were not allowed to get a loan modification.

Now, at-risk mortgagors will be able to lower the principle they must pay on their loans by up to 30% in what is being called a ‘partial claim’. However much the principal is reduced will be combined into a second, no-interest mortgage that isn’t due until the first one is completed, or the property no longer belongs to the borrower.

Reducing the principal on the original mortgage in this way will allow homeowners to lower their monthly mortgage payments to an amount they can afford, preventing foreclosures and defaults. The old MHA loan modification program used to leave the principle alone, reducing only the interest rate.

The goal of either method, however, is to reduce monthly mortgage expenses for homeowners to 31% of their income.

An added bonus of the new MHA program is its ability to bring borrowers up-to-date on their payments: it includes all past due payment into the second, no-interest mortgage.

The program is called FHA Home Affordable Modification, and in order to qualify, a borrower must already be in default on their mortgage, (that is, at least one month past due on payments) but not more than one year past due.  This, hopefully, will prevent those who are irresponsible and completely unable to make payments from joining, and also preventing those who can make their payments just fine from taking advantage of the program.

In addition, any borrower wishing to take advantage of the program must be the owner and occupant of a single-family residence, and be able to prove that they have enough financial resources to maintain payments on the new mortgage. They must also not have purposefully defaulted on their mortgage payments even though they had enough money to pay. Also, applicants must not have more than 55% of their monthly income in total debt after modification.

The new program doesn’t only incentivize the mortgage owners, but lenders as well. It offers up to $1,200 for each loan to lenders. Homeowners who do not have an FHA mortgage should try to get a loan modification through the first Making Home Affordable loan modification programs which deal mainly with changes of interest rates.

For more information on the FHA-Home Affordable Refinance Program can be found on the HUD website.

All over the state, banks and lending institutions are growing their loss mitigation departments in order to process more short sale transactions and facilitate loan modifications and reamortizations. In this day and age, most lenders accept short sale requests and/or offers, even after someone has been issued a Notice of Default. Because of the 2009 foreclosure crisis, mortgage lenders have been suffering from record losses and are now much more willing to work with homeowners to complete short sales.

This means that California homeowners can be assured that even if they get behind on their payments, they are not automatically going to have to default or be foreclosed on. The problem is, different lenders have different levels of tolerance for short sales and requests for loan mods. Most lenders will have their own pre-determined, specific criteria for these transactions. A homeowner must jump through a lot of hoops- conditions, approvals, paperwork, and the like- to get a short sale through.

And there are other factors that determine whether or not a lending institution will accept a request for a shortsale, and the level of ‘liens’ may help make that decision. Junior liens for example (like HOA and HELOC lenders, and those that deal with second mortgages) might be more willing to accept short sales. Tax liens holders, on the other hand, are more likely to reject such requests.  And if your lender asked for mortgage insurance on the loan they gave you, they’ll also probably need the insurer to be a part of the negotiations as they navigate the short sale.  The insurer may be asked to shell out some dough to help cushion the fall of the lender.

Basically, there is a vast network of steps you need to take, people and institutions that needs to be involved, parameters that must be met, and processes that you must slog through to complete a real estate short sale, get a loan modification, or otherwise avoid foreclosure. It’s a complex, specialized kind of transaction, and the entire process tends to have a high failure rate, especially among homeowners that choose to forge th path alone, without professional counseling or help. A knowledgeable, experienced professional can really facilitate the process. A loss mitigation specialist or real estate lawyer who specializes in short sales would be a good person to have on your team during such a time.

If you have recently lost possession of your house to a painful foreclosure or short sale, there’s a chance you may be able to afford a new home within the next two years if you get on it right away and stay diligent and dedicated to fixing your credit rating.

Whether you were able to get your lender to agree to a shortsale, or you had to resort to the worse blow of foreclosure, if you get started rebuilding right away, you can take steps to re-polish your tarnished credit report. You should definitely go over the details of your credit report- you need to know exactly where you are right now. You can get a free report through many venues, and you should double-check with your own records for accuracy. And if you find any egregious (or even small) problems, you should bring it up right away.

If you have other old debts, you should pay them off as quickly as humanly possible. Forgo buying anything that’s not a necessity and pay off your credit card or car, because those little things can help.

Watch out for scammers who purport they’ll help you repair your credit Don’t pay anyone to do anything illegal, and don’t pay someone before you’re completely certain what service they’ll be providing you.

Double-check the status of the shortsale you did. Make sure that your account shows the zero you deserve for allowing your mortgage lender to accept a payoff for less than what you owed. You went through the struggle of a short sale, and if they don’t write it off as a zero, you need to make sure the discrepancy is addressed.

Of course, you can’t just automatically assume that your short sale is obligation-free. IT depends on your lender- some will automatically file a deficiency judgment and make you pay some portion of the discrepancy between what you earned on the escrow and what you owe the bank.  Also- the federal government may be able to tax this difference, if the bank DOES pay for it, as income. Make sure you’re clear on the stipulations of your lender and the federal tax code.

The point is, after the emotional roller-coaster of having to give up your home, you need to stay on top of your finances. If you’re responsible and diligent, you might be able to get yourself a new home in just a few short years. But make sure it’s with a loan you can afford to pay!

If you’re thinking of getting a short sale done for your in-trouble home to avoid a foreclosure, you should know that a bank is not obligated to sell your house. When a  bank or lending institution decides to do a short sale, they have to basically eat the difference between the amount of the loan you owe and the proceeds from the escrow, which will necessarily be less. They don’t like doing this. A potential buyer can go through all of the rigamaroll of paperwork to pay for inspections, make an offer, put down the deposit, and get the sale process started. But as soon as they make an offer, the bank might then go ahead and attempt to convince you that you aught to refinance your home loan and stay in your house, so that the bank can avoid having to eat the discrepancy between selling price and what you.

But, a short sale contract in and of itself includes a stipulation by which a bank must approve the sale. A seller can get their money back in you are persuaded to refinance instead of making the short sale. The problem with this is that it ties up months of the buyer’s time and money, and the buyer has to basically start all over again. So any buyer that needs to get a house in a specific neighborhood or has time pressures may be inclined to go for a foreclosure house instead.

Buyers will look for clues in a short sale to help assure then that the bank (or you) are not going to pull out at the last minute. If you’ve moved out of the house, a seller will be much more likely to want to buy form you, because that suggests that you will not be swayed to try to refinance your house instead of selling it in a short sale. If you’re concerned that buyers aren’t making offers, consider moving out of the house or making efforts to make it look as if you are currently in the process of doing so, and you may have much more luck.

Another thing is to make sure your listing has the stamp of approval: “Bank Approved Short Sale”, which signals to potential buyers that the bank has approved the short sale, and only one need do so, so that  the buyer knows your insurer or other parties aren’t involved and won’t tie up the process.

Look out for the lingering effects of bankruptcies, foreclosures, and short sales, in that order. Bankruptcies have the worst impact on your credit, spreading out among many accounts over many years. Foreclosures are just your mortgage, so you may be able to repair your scores in seven to ten years. Shortsales, on the other hand, have an indeterminate amount of impact on your credit score, but certainly no more than a foreclosure, and very likely less.

Lenders will almost always be more sympathetic to homeowners who had to lose their homes through short sale instead of foreclosures. It shows a level of responsibility and dedication that indicates an applicant is willing to do legwork and takes care of what they can. You may even be able to get another mortgage within a year or two after a short sale, if you fenagle it right and can prove you were experiences undue hardship that is no longer ongoing.

A way to mitigate the effects of any home loss, but especially a short sale, it to maintain good checking and savings accounts, because a mortgage lender in the future will need a few months’ worth of bank statements.

Stay on top of your credit card payments, and apply for new ones with fixed-rate payments. Of course, don’t apply for too much, or you’ll look desperate or out of control. Small loans can also work to help reestablish credit.

The total volume of mortgages may have dropped last year, but the rate of fraud cases has not. According to a study conducted by a research institution for mortgage assets in Virginia,  current levels of faud among brokers, loan officers, and industry professionals has outstripped the levels they were in 2007 by almost half as much.

The research institute does not actually release specific figures, but it gathers its data from a meta-analysis of many surveys of lenders conducted by other groups in the year 2008.  In the end, their data includes information from almost all mortgage professionals across the country.

However, the data set cannot express how much of the ‘fraud’ was egregious, and how much was just a little fudging by loan professionals on homeowner’s applications. There is a difference between ‘fraud for profit’, which is in the first category, and ‘fraud for property’. The second doesn’t actually defraud lenders out of money, and is much more common.

The results were surprising to officials in the industry. Most believed that the recent downturn and host of foreclosures had flushed out most of the unscrupulous brokers and officers. But apparently not. And those who reamin have fewer and fewer transactions on which to turn a profit, forcing them to be more obvious and indelicate in their fraudulent practices.

Mortgage fraud affects all borrowers because it forces lenders to get back those losses through higher fees or interest rates, and lenders rarely pursue legal action because its so expensive.