Posted on November 18, 2010 by Ms Short Sale

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What Is The Chance Of Having A Successful Short Sale?

What is the chance of having short sale success is the question on most people’s mind. A successful short sale could be considered a success when the home owner sells his/her home before a foreclosure happens and walks away without a deficiency judgment from the lender.

Short Sales are not uncommon to Banks and Lenders there are short sale and foreclosure statistics from Realty Trac that suggest distressed properties are one third of the listings for sale. In fact in some areas like Arizona and Las Vegas they are almost half of the sales.

In fact Banks and Lenders are becoming proactive and mailing letters out to their customers explaining the short sale program. They have delegated entire offices and staff to Loss Mitigation. They want to take the quickest route to get the non performing asset off their books.


The chances of a short sale success are increased if;

  • The property is damaged and needs lots of repairs.
  • The homeowner owes more on the property than current market value.
  • If there is lots of bank owned houses and short sales on the market.
  • If the homeowner has already tried to sell or refinance the house for the owed amount and failed because the current market value is less than what is owed to the lender.
  • If the cost for the lender to foreclosure plus the value of the house add up to be more than the house is worth.
  • If there are junior liens on the house that are also accepting less money or being forgiven completely.
  • If you have a Real Estate Agent who is a Certified Short Sale specialist
  • If you have all the elements required for the Lenders package to determine if you are eligible for the program

Short Sales are complicated and should be handled by a talented and experienced Certified Distressed Property Agent like myself.If you live in Washington State I would be happy to assist you with your short sale. The areas I specialize in is Kitsap County, Bremerton, Silverdale, Port Orchard, Poulsbo etc…

There is great training out there for Agents now so there is no reason to settle for less. You wouldn’t go to your Chiropractor for brain surgery and you shouldn’t allow an inexperienced person to assist you with the Short sale of your home. After all, your home is in jeopardy of foreclosure and your credit is in jeopardy of being ruined for years to come.

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Critical Elements of The Short Sale Process

Posted on September 15, 2010 by Ms Short Sale

The short sale process is hard to define because it varies from transaction to transaction. There are so many variables in the transaction that are critical to the process . The process is not complicated but certain factors can complicate the process.

For instance:

  • How many other foreclosures, Short Sales, Bank owned and distressed properties are in the area?
  • Who the Lender is and who are their Investors?
  • Who the Short Sale negotiator in the Loss Mitigation Department? Are they swamped with files and overwhelmed?
  • Does the home have a second mortgage?
  • Does it have Mortgage Insurance on it because if it has either of these it could change the outcome entirely? This is the reason why you would want to work with a Short Sale Specialist who knows how to respond to each of these scenarios.
  • Another factor is how much the homeowner wants to participate?
  • Are they helpful and get the documentation in a timely manner when it is requested?
  • Do they let Buyers come to see the home when they call for an appointment?
  • Did they prepare the house for sale, for example cleaning and un-cluttering, doing the yard work and making everything presentable?
  • Is the house priced correctly and low enough to attract a buyer and high enough that the investor will approve it?
  • Did the BPO come in to high and what does that mean?
  • Is the home owner eligible for a short sale do they have a short fall in their income, do they have a hardship, are they insolvent?
  • Is the short sale package put together correctly? Is all the documentation there that is required from the Lender?

The process is not complicated but some factors can complicate the process. These questions are just a few of the factors that determine the outcome of a Short Sale and if you’re willing to work with a Short Sale Specialist they can streamline this whole process for you. They will do all this homework and answer all these questions up front and if something pops up along the way they have the knowledge and resources to deal with it. I highly recommend you seek out a short sale specialist to help you with the sale of your home.

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Homeowner Short Sale Webinar

Posted on September 1, 2010 by Ms Short Sale
Join us for a Webinar on Thursday September 9

This is a webinar about Short Sales. It is an informational webinar designed to explain what a short sale is and how it can help you.

Space is limited.
Reserve your Webinar seat now at:
https://www3.gotomeeting.com/register/751360726
Title: Homeowner Short Sale Webinar
Date: Thursday, September 9, 2010
Time: 10:00 AM – 11:00 AM PDT
Space is limited.
Reserve your Webinar seat now at:
https://www3.gotomeeting.com/register/751360726
After registering you will receive a confirmation email containing information about joining the Webinar.

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Short Sale Hardship Letter

Posted on September 1, 2010 by Ms Short Sale

Short Sale Hardship Letter

All Lenders require a hardship letter in a short sale. A lender will want you to write a brief couple of paragraphs explaining what the situation is how it came to be and how long it is expected to last. Remember a person is reading this letter so make it compelling and personal.

Some examples of events that would cause a hardship are Loss of a job, business failure, damage to property, death of a spouse, severe illness, Divorce, medical bills, mortgage payment adjustment, reduced income, incarceration etc…

A hardship is an event or ongoing circumstance that is happening or going to happen that will cause a short fall in your monthly income. A hardship could be defined as a material change in the financial situation of a home owner that is or will affect their ability to pay their mortgage.

Remember to put the hardship letter all on one page because a short sale package can be rather large and you want to keep everything as streamline as possible so your package can be reviewed and qualified for the short sale quickly.

If you make sure you cover the three qualifications for a hardship in the letter the letter will address everything the lender needs to know. The three qualifications are

1. Financial Hardship: A material change in-between the day the mortgage was signed and today that has affected your ability to pay your monthly mortgage payment.

2. Monthly short fall: A monthly profit and loss statement which is a financial worksheet showing you cannot afford to pay the mortgage

Total monthly income – Total Monthly Expenses = Monthly Short fall

3. Insolvency: You do not have the means to pay the mortgage. You do not have the cash lying around in the stock market or in your savings account to make the payments.


Just write a small paragraph or a few sentences covering these three items in your letter and tie it into your circumstances and it will all make sense to the Lender why you need and qualify for a short sale

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Ten Pre-Foreclosure Options Designed to Prevent Foreclosure

Posted on August 1, 2010 by Ms Short Sale

Ten Pre-Foreclosure Options designed to prevent Foreclosure. You have Foreclosure options even though you’ve defaulted on your mortgage and you have received a Notice of Default. A Foreclosure date is set to sell your home at Auction.  You’re angry, scared and about to lose your home. The good news is, you have options that will allow you to prevent foreclosure either permanently or for a while you sort out your finances and get back on your feet.

 1. Short Sale

 If your lender agrees to a short sale, you can sell your home for fair market value or less and the lender will take a loss on the difference between what you owe on the mortgage and what the fair market value is of your home. If you are a distressed homeowner there are multiple ways to qualify for a short sale. You will need to collect all your financial data, write a hardship letter and attach it along with a purchase and sale agreement to the Lenders forms. You will send this entire package over to the lender for approval. Once your package is approved you can sell your home as a short sale. It is best if you hire a Certified Short Sale Specialist to help you with the short sale process as well as negotiate with the Lender.

 2. Forbearance

 Through forbearance, you and your lender work out an agreement that will allow you to catch up on missed mortgage payments and fees over an extended period of time. They will calculate the amount of payments you are behind and spread the amount over the next few months payments until you are caught up. This prevents foreclosure due to mortgage loan acceleration, but doesn’t help borrowers whose financial setbacks are more than just temporary.

 3. Loan Modification

 A loan modification agreement provides you with a new loan without the need to refinance. Depending on the type of loan you have, the federal government may require your lender to modify your loan. Many people apply for loan modifications but few ever get them. There is always the chance the home will slip into Foreclosure while waiting for an approval response from the Lender.

 4. Mortgage Assumption

 Through mortgage assumption, another person “assumes” your loan at its current interest rate and takes over the payments. You are released from the loan relieving you of the worry of an impending foreclosure. Few loans are assumable these days but it never hurts to check with your lender to see if it is assumable.

 5. Sell the Home

 If you have equity in your property you can sell your home. Selling your home is a good option if you have enough equity in the property that you can afford to sell it at a discount. This increases the chances that you’ll be able to sell the home before it forecloses.

 6. Rent the House

Renting your house is a great option if you can’t pay the mortgage now or in the near future but want to maintain ownership of the property. By becoming a landlord you can rent your house out for enough money to cover your monthly mortgage payment. You can use the rental income you receive to pay the monthly payments until you can afford to move back into your house.

 7. File Bankruptcy

 Bankruptcy’s automatic stay prevents lenders from filing foreclosure documents or pursuing an ongoing foreclosure. A Chapter 7 bankruptcy is more comfortable than Chapter 13 because you don’t have to pay any of it back.  Consult an Attorney because if you have too much equity the courts could sell the home to pay off the creditors. In a Chapter 13 bankruptcy a bankruptcy judge has the authority to force your lender to modify your loan rather than foreclose on the note.

 8. Demand Original Loan Documents

 This strategy involves demanding that your lender provide you with evidence of the original mortgage contract that you signed, proving that they have the right to foreclose. Since most lenders often buy and sell mortgages, you need to know who actually has a rights to the property. Demanding the original paperwork on the loan can delay foreclosure and sometimes give you more time to negotiate with the lender for short sale or a loan modification.

 9. Liquidate your Assets

 Sell your stock, cash in your CDs and dip into your retirement plan. Borrow money from family members. Pick up a part time job. Do whatever you need to do to either catch up on missed payments or continue making mortgage payments until you can successfully negotiate foreclosure alternatives with your lender. Don’t forget about the money you’ve put away in the past since liquidating your assets can be crucial to avoiding foreclosure.

 10. Defer Payments

 If you can convince your lender of your financial duress, you may be able to defer any mortgage payments you’ve missed into one balloon payment due at the end of your mortgage term. This option works best for borrowers who can afford to resume making payments but can’t afford to catch up on previously missed payments and steadily increasing fees.

Please keep in mind that your lender may offer additional options to help you prevent foreclosure. Regardless of your current situation, however, there are ways you can fight to either keep your house or prevent a damaging foreclosure from appearing on your credit history.

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Avoid Foreclosure with a Short Sale

Posted on July 29, 2010 by Ms Short Sale

Avoid Foreclosure with a short sale. If you have received your notice of default and have a date for when your home will be foreclosed you have a very good chance of postponing your foreclosure date if you have a short sale in process. You don’t even have to wait for your letter. You can apply for a short sale for simply being 30 days late.

If the lender has a short sale package on their desk and they have approved the short sale they will postpone the foreclosure date.

I went to the County courthouse to attend some of the foreclosure auctions and I would guess out of the twenty homes up for auction that day 16 of them were postponed.

Lenders don’t want to foreclose if there is another option. I think a short sale is one of the best options. It helps to save your credit so you are able to buy another home in the near future.

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Short Sale: The New Exit Strategy

Posted on July 28, 2010 by Ms Short Sale

People are saying that a Short Sale is the new exit strategy. It seems a lot of home owners are short selling and walking away from their homes. I have talked to people who are so frustrated because they purchased while in the height of the market and now their home will take 5 to 10 years to be worth what they currently owe on it. Others are frustrated because their neighbors are selling their homes as short sales or there are foreclosures in the neighborhood and the combination is driving down the value of their own home. Some people are even using the strategy of short selling their own home and then go out and buy an even nicer home in the same neighborhood for a much lower price.

Short Sale the new exit strategy is a true statement. Short sales and bank owned property are almost 50% of the listed properties for sale in the United States.

Banks and Lenders are wising up; they know they are going to recoup more money by a short sale than waiting to go through the foreclosure process. For example if a house forecloses the lender has the monthly carrying costs with the loan, the Attorneys fees court filing fees etc.. then after they own the house they have to have the locks changed, lawn maintenance, repairs, insurance, water and power bills, real estate commissions etc… This whole process could take the Lender up to a year and a half to get through. It is easier and more cost effective to just short sale the house and put the money back into their accounts where it can be put to good use on other investments.

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How to do a Short Sale

Posted on July 28, 2010 by Ms Short Sale

How to Short Sale, a Short Sale is a process in which you sell your home for less than you currently owe on your mortgage. The first thing you should do is hire a Short Sale Specialist who is a licensed Real Estate Agent to help you with the process.

Then you have your Short Sale Specialist get sale comparables for your neighborhood. This will help to determine the market value for your house. It will also let you know where you stand and if you even need a short sale. If the market value is less than what you owe then you will need a short sale to sell the home.

Second you will want to have your Short Sale Specialist get a short sale package from the Lender if they provide one. In the mean time gather all the elements to put into the Short Sale Package and add it to the Lenders Forms.

Third list the home for sale

Fourth when you have a buyer you put it with your package and submit it to the Lender.

Fifth wait for the Lender to determine if they are going to accept the short sale. If they accept then the buyer finishes the purchase process.

Of course this is an article that severely simplifies the Short Sale Process. If you want in-depth information with examples and the forms to use with the lenders, if you would like a manual to explain the whole process with videos to simplify everything then stay tuned for the Home Owners Short Sale Success Secrets Course. Coming Soon!

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The Short Sale Process

Posted on July 27, 2010 by Ms Short Sale

The Short Sale Process

The Short Sale Process is a series of steps you take to be able to sell your home for less than what you own on the mortgage.

Step 1 Locate a Short Sale Specialist Real Estate Agent. Have them give you a list of all the comparable homes for sale and that have sold in the last six months. These homes are usually within one mile of your house. You can search in a wider radius if you need to. This step will help you to know what the market value of your home is. The market value and the loan value are two different things.

Step 2 Determine your pricing strategy with the Short Sale Specialist. You must be strategically priced to be competitive and to get an offer to purchase really fast. There is a formula to use to come up with an acceptable price that the Lender will accept.

Step 3 Prepare a Short Sale Package. This will include your financials, a hardship letter, letter of Authorization and the package the Lender provides. There is a system to how you put your package together. If you do it wrong or leave out any valuable information, your package will be denied and put on the bottom of the pile. Lenders do not have the time to educate you to the process, so know what you are doing upfront.

Step 4 You must know up front if you are a distressed homeowner and qualify for a short sale. There are parameters Lenders use to determine if you are a distresses homeowner.

Step 5 List your house for Sale. Remember to price it strategically. Price is not a big concern for you because you will not be allowed to receive any money from the sale of your house. If the Lender is taking a loss they will not allow you to receive money. The only exception is the HAFA program and not many people qualify for it.

Step 6 When you receive an offer on your house put it in the package you prepared and send the entire thing to the lender. Now you wait. Short sales tend to take a long time usually 60 to 90 days. Lenders are getting faster but it is still a large process.

Step 7 Follow up, Follow up, Follow up

The process was simplified for this article. There is a lot more work and forms and due diligence that goes on during the short sale process but this will give you an idea of what the process looks like.

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7 Pitfalls & Solutions of a Short Sale

Posted on May 1, 2010 by Ms Short Sale

7 Short Sale Pitfalls & Solutions

As a homeowner considering a short sale, it is important you understand the process. Following are some of the most common mistakes agents and homeowners make when handling a short sale.

1.     Pitfall:  Your Property is Priced Incorrectly

This is the most common mistake made with all properties, and the most common reason a property doesn’t sell.

Solution: Pricing Your Home an Aggressive Short Sale Strategy. Your real estate agent will go through a detailed listing price strategy with you, allowing you to see exactly where your property should be priced based on its current condition, sales in your area, and most importantly, how much time you have left to sell.

2. Pitfall: Your Short Sale Proposal is Incomplete

Your Short Sale Proposal is Incomplete
This is one of the most frequently seen causes for the rejection of short sales proposals. Most agents do not understand the short sale process and what your lender will be looking for.

Solution: Understand All Aspects of the Process
Your agent should understand the short sale process in detail and be able to explain it clearly. The agent should also be able to communicate effectively with both you and lenders to produce a complete and cohesive proposal.

3.     Pitfall: There has been Inadequate Follow-up and Communication

There has been Inadequate Follow-up and Communication
As your property goes through each stage of the short sale process, an agent can jeopardize the transaction by not properly communicating with everyone involved. As the homeowner, you may not know that your file has been delayed, and that you again may run out of time to close and avoid foreclosure.

Solution: Select an Agent That’s a Short Sale Specialist
The right agent knows exactly how to follow up to ensure that your lender’s issues are addressed in a timely manner, and will make certain you do not have unnecessary delays.

4.     Pitfall: Not Enough Time

There Isn’t Enough Time
It is critical that your agent understands the foreclosure laws in your area. They should be able to show you an estimated timeline for the process, from start to closing. In addition, they should know how to communicate with your lender. Certain information can be provided to lenders to postpone your foreclosure for weeks or months in order to negotiate a sale.

Solution: Provide Accurate and Useful Information
Make sure you provide your agent accurate information as to exactly how many payments you have missed and any correspondence you have received from your lender. This will allow your agent to understand your situation and work to improve it.

5.     Pitfall: Your Deal is Not Submitted Properly

Your Deal is Not Submitted Properly
If you do not follow the directions you receive for submission, then you are expecting an over-worked, under-staffed department to go out of their way to handle your file. There is very little likelihood of this situation working out in your favor.

Solution: Follow Instructions Closely
If you are instructed to fax your file, fax it and send a backup copy in the mail. If you are instructed to mail two copies, mail two copies. When you reach the point of having a contract, all your information, and a completed proposal, you do not want your deal to fall apart because no one sees it.

6.     Pitfall: The Buyer’s Offer is Too Low

The Buyer’s Offer is Too Low

Many agents will encourage you to submit any offer that comes in. The reality is that a short sale is not the same as a fire sale. In order to have a legitimate chance of getting your deal approved, you must have an offer that is more attractive to the lender than a foreclosure.

Solution: Proper Negotiation
The right agent will work with you to properly negotiate any offer that you receive to get ‘highest and best’ from each potential buyer. This ensures you are presenting the best possible solution to your lender.

7.     Pitfall: The Buyer’s Contract is Not Strong Enough

The Buyer’s Contract is Not Strong Enough
especially in our current economic climate, willingness to make an offer on a property does not mean that a buyer is truly qualified to purchase. The reality is that buyers need to be preapproved for financing, closing funds must be verified, and their ability to buy needs to be confirmed.

Solution: An Agent Familiar with Qualifying Buyers
Your agent should be familiar with what must be verified in order to qualify a buyer to submit an offer on your property. Otherwise, these offers may have little chance of closing. Don’t risk this process with an uneducated agent who does not appreciate this aspect of short sales.

In conclusion, While these pitfalls may seem troublesome, the right agent can help you navigate your way to a successful closing. Don’t endanger your financial future and the potential sale of your home with an agent who does not fully understand the process. Agents who are Short Sale Specialist have completed extensive training in the short sale process, and in assisting struggling homeowners who need real solutions. They understand what you are going through, and are here to serve and help save your family’s interests.

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