What are the advantages of a short sale?
Minimize damaging impact to credit: Foreclosure can remain on your credit for up to seven years while a short sale usually gets reported as a “settled debt” and is significantly less damaging. With a short sale, your FICO score will not be as negatively impacted as it would be with a foreclosure, and you will be able to get into a new home much sooner as well. back to top...
Minimize financial exposure/liability: In many foreclosure situations, the lender will ultimately sell the property at a significant discount once they foreclose and repossess the property. The homeowner can then be financially liable to the lender. While the same may be true with a short sale, the difference is with a short sale the homeowner is still involved in the process and can therefore contribute their input and have more control over the sale price of the property and the potential associated liabilities. In a foreclosure, however, once the lender repossesses the property, the homeowner is typically defenseless with respect to what follows next. back to top...
How do I qualify for a short sale?
In order to be eligible for a short sale, a homeowner must be able to prove to the lender that they are a victim to a “hardship” and are therefore unable to continue making payments on their mortgage.
What criteria must I meet to be considered in a “hardship” situation?
A hardship situation is one that is the result of some extenuating circumstance that forced the borrower into a position where they can no longer afford their mortgage payments. While every situation is unique, some common examples of hardship include: back to top...
• Unemployment or loss of primary income source
• Inability to work due to health crisis
• Mounting medical expenses
• Employment relocation
• Failure of business
• Bankruptcy
• Death of spouse or significant other
• Divorce or separation
What do I need to do to get started?
In addition to the homeowner proving hardship, lenders require a specific set of supporting financial documents to consider a short sale. Contact Lynn today and we will help you get started. back to top...
When should I begin the short sale process?
As soon as you possibly can! Foreclosure situations tend to be extremely time sensitive. The sooner we can begin the negotiations with your lender, the greater the chances of a successful resolution. There is no need to wait until the lender sends you a notice of default or initiates formal foreclosure proceedings against you. Time is of the essence! Please contact Lynn today for a free consultation. back to top...
How much will a short sale cost me?
Absolutely nothing! Unlike other loss mitigation companies, Lynn provides our services at no cost to the homeowner. Our fees are never paid by the homeowner, and we are only compensated if we successfully negotiate a short sale. Please contact Lynn today to take the first step toward stability. back to top...
How long does a short sale typically take to complete?
Every short sale situation is unique and follows its own timeline. Typically a short sale is completed within one to four months from the time we have a complete short sale package ready to present to the lender. Having said that, we have successfully negotiated a short sale in as little as two weeks. Timing depends on how quickly we can begin negotiating with your lender. back to top...
Can the process be expedited if I am imminently facing foreclosure or an auction date has been set?
If you are imminently facing foreclosure or even if an auction date has already been set, the process can certainly be expedited and we have even had lenders postpone the auction date. Please contact us today for a free consultation. back to top...
What affect will a short sale vs. a foreclosure have on my credit?
Foreclosure can remain on your credit for up to seven years while a short sale usually gets reported as a “settled debt” and is significantly less damaging to your credit history. With a short sale, your FICO score will not be as negatively impacted as it would be with a foreclosure, and you will be able to get into a new home much sooner as well.
Lynn does not provide credit counseling services, but credit experts say that a foreclosure will typically reduce a borrower’s FICO score by 250 to 280 points and the borrower would usually need to wait more than 36 months before a lender will offer any kind of interest rate that makes sense. A short sale, on the other hand, will typically only result in an 80 to 100 point reduction to the borrower’s credit score and a significantly shorter waiting period before buying another home, usually about 18 months or less. back to top...
What is my potential liability after completing a short sale?
As with all foreclosures, there are several potential tax and liability considerations when doing a short sale. With a short sale, however, these potential tax and other liabilities are typically less frequent and less severe. back to top...
Tax ramifications:
After completing the short sale your lender may decide to issue you a 1099 for the difference between the price your home sold for and what you owed, and you can later be taxed by the IRS on this amount as income.
It is important to note that if specific criteria are met, the IRS may release the borrower from this tax liability. Furthermore, Congress is currently considering legislation that would eliminate this taxation of so-called “income” due to cancellation of debt. back to top...
What is a deficiency judgment?
Lender recourse: In some states and with certain types of loans, lenders can pursue a court decision called a “deficiency judgment” making you personally liable for the remaining amount owed to them above the short sale price. In some cases, the lender may ask you to pay a portion of the difference back in the form of an IOU. Arizona is known as a “non-recourse” state. If the existing mortgage on your property was solely for the acquisition of the home, it is not likely the lender would be granted a deficiency judgment.
The lender has sole discretion whether to pursue a deficiency judgment in those instances when a deficiency judgment is permitted. Unlike other loss mitigation companies that offer “basic” and “premium” services, we diligently apply ourselves to every short sale case with the goal of negotiating with the lender to eliminate a deficiency judgment, minimize your tax liability, and to consider your debt as settled. back to top...
Why would my lender agree to a short sale?
In most distressed mortgage situations, foreclosure is a last resort for all parties involved. Simply put, both the homeowner and the lender usually want to avoid foreclosure at all costs. That is why lenders have come up with various alternatives to foreclosure, which they are typically very motivated to pursue prior to going to foreclosure.
A short sale gives the lender the ability to cut its losses upfront thereby avoiding the expense and time of a foreclosure and potentially greater losses. Lenders want to make loans; they do not want to be in the business of owning and managing real estate. Whether the lender chooses to go through with a foreclosure or agree to a short sale, they are taking a loss either way, but in many cases they would take less of a loss with a short sale and resolve the matter in a comparatively shorter time frame. In nearly every case, a short sale offers a better return on the lender’s investment than a foreclosure does. back to top...
What is your relationship with lenders?
Lynn works with independent third-party loss mitigators. It is because of our objectivity and neutrality that homeowners and their lenders can count on us to be an impartial driver of the loss mitigation process. Lynn stands apart from the crowd because she strives to equally serve all parties to the transaction, and affect a win-win outcome for all. back to top...
Why shouldn’t I negotiate with my lender directly?
We firmly believe that just as most borrowers use a professional to initially get into a mortgage, it is in their best interest to do so if they are in the unfortunate position that they need to get out of a mortgage. At best, you only get one shot to negotiate your way out of foreclosure, and while it is certainly possible to negotiate with the lender yourself, it is highly unadvisable.
Most lenders’ loss mitigation departments are understaffed, and the overworked loss mitigators are usually overloaded with all parties vying for their attention. Unfortunately, the loss mitigators can be very difficult to speak with, and when you finally do get through, you have very little time with which to make your case. Furthermore, the added stress of foreclosure in itself makes it difficult for a homeowner to effectively negotiate and conduct such an emotional transaction as a foreclosure.
Because we work with all lenders and represent homeowners from all across the country, and since we specialize in loss mitigation, we understand how to collect, prepare, and effectively present the information that lenders require to seriously consider a loss mitigation solution such as a short sale. We have excellent working relationships with the lenders’ loss mitigation departments and we will leverage our network and expertise to help you solve your problem. Please contact Lynn today for a free consultation so that we can be of immediate assistance to you. back to top...
What role does the Realtor have in a short sale?
It is of vital importance that you work with a capable Realtor familiar with working in a distressed property situation so that we can effectively negotiate with your lender and secure a short sale agreement. If you have a preferred Realtor that you would like to use, Lynn can partner with them as well, provided they agree to conform to our standard Realtor terms and conditions. back to top...
What role can an investor have in a short sale?
Investors often play a valuable role in a short sale, in that, in order to successfully complete a short sale an offer must be made on the property that the lender will accept as fair market value. An investor can step in as a buyer and be the crucial link to making the short sale possible.
Unfortunately, there is no shortage of sharks and vulture investors on the prowl in the foreclosure arena looking to take advantage of distressed homeowners. Beware of these scammers!
These individuals and companies often market themselves as expert negotiators and loss mitigators when in reality they simply make “lowball” offers on the property that the lender will most likely not accept and that will waste precious time in a very time-sensitive situation, or worse, will lead to the lender foreclosing on you and repossessing your home.
Even on the off-chance that the lender does accept their offer your potential tax liability can be much greater. back to top...
How can Lynn protect me from unscrupulous investors taking advantage of me?
By working with Lynn you can be assured that you are protected from these unscrupulous investors.
We will only have your property marketed to qualified, serious buyers who are prepared to make fair offers, including our network of pre-screened legitimate investors. back to top...
How does filing for bankruptcy impact my ability to do a short sale?
Lynn can still help negotiate a short sale with your lender even if you file for bankruptcy protection.
However, in our experience, bankruptcy is usually employed only as a last resort in a foreclosure situation. Typically, filing for bankruptcy only temporarily delays the foreclosure process (or in legal terminology, it provides a “stay”). Eventually the property is sold to satisfy debts to creditors.
We strongly urge you to seek the advice of a bankruptcy attorney if you are considering this option. back to top...
Can Lynn help me with my government backed (or insured) mortgage?
Absolutely! Lynn is prepared to help you in various government loans, including FHA or VA owned mortgages and Fannie Mae / Freddie Mac insured mortgages, as well as privately insured mortgages.
We are highly proficient in all of the specific rules and regulations governing the acceptable short payoffs of these mortgages. back to top...
Why should I use Lynn to help me?
Lynn is a Certified Distressed Property Expert (CDPE) with the contacts necessary to conduct a successful short sale. Her affiliates have over four decades of combined experience in all areas of the mortgage and real estate industries.
Her expert loss mitigation specialists are highly trained and thoroughly knowledgeable in every aspect of this often complicated process. They operate in every state and have a comprehensive understanding of all the ins-and-outs and rules and regulations applicable to each foreclosure situation back to top...
