Q2. Will the bank come after me for the difference?
A. During the short sale process, we can negotiate with the lender to not seek a deficiency judgment against the homeowner.

Some lenders as a matter of policy, will not seek a judgment against the homeowner because they feel they have waived their right by accepting a short sale however, we have them acknowledge it in writing that they will not seek a judgment.

There is a second issue as it relates to the deficiency and that is the 1099. The lender will issue a 1099 to the homeowner for the difference.
In my dealing with lenders, I have found that they generally will not seek a deficiency judgment because of the hardship.

In negotiate with your lender to report your loan as payment in full.
Here is an important note. The lender, if they issue a 1099 cannot then sue for a deficiency judgment. The lender can only pursue one or the other.
It is obviously in the best interest of the homeowner to be proactive and deal with the foreclosure NOW. At least there is a chance that I can negotiate on your behalf.

Q3. What About My Credit?
A. The big key here is to avoid foreclosure. By nearly any measure, a foreclosure is the most damaging event a credit status can encounter - worse than bankruptcy. In the course of getting your short sale approved you may miss your mortgage payments, and these will show on your credit.

By avoiding foreclosure, you will likely be able to resume normal borrowing (car loans, credit cards, consumer goods and such) relatively quickly.
Your credit will recover much quicker from the credit dings of a few late mortgage payments, if you keep your other accounts current. Always stay on top of your consumer credit. So, consider allocating your funds to meet basic necessities (food, utilities, household needs, auto expenses and such) first. Beyond paying for necessities plan to pay other bill to keep as many accounts current as possible.

Keep “necessary” Accounts Current when deciding which credit bills to pay. If you are using a credit card to temporarily pay for necessities, you want to be sure to not jeopardize the availability of that account.

A short sale may be just one part of a larger effort to get through a tough period. I want to help make it possible for your credit to recover quickly.
YOU need to avoid foreclosure – and that’s where I can assist you.

Q4. Is a short sale right for me?
A. Mortgage lenders are increasingly willing to work with borrowers faced with a financial hardship to accept a discounted payoff on a mortgage. If you are faced with a hardship, and are unable to meet your obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through foreclosure.

As you consider the option of pursuing a short sale, remember your lender is looking to limit any potential loss on your loan. By completing a short sale, your lender has arrived at a solution that is, for them, much better than a foreclosure.

Q5. If I do a short sale, how much will I have to pay to sell my home?
A. Nothing. It’s true, NO OUT OF POCKET EXPENSE. When your lender approves the short sale, all commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the short sale approval. Remember, lenders approve short sales and accept the resulting loss in an effort to avoid bigger losses through foreclosure.

Q6. What sort of hardship would my lender consider legitimate?
A. To some extent, that will depend upon the mortgage company considering the short sale request. Generally, as long as the hardship is real and the mortgage company believes the loan is likely to become delinquent as a result, the short sale request will be processed by the Loss Mitigation Department. A big key to getting Loss Mitigation to accept a hardship is to submit a strong hardship letter. The hardship letter sets the tone for the entire file.

Q7. I am current on my mortgage, will my lender consider a short sale?
A. The answer is, maybe. Some lenders will accept a short sale file for approval on loans that are not delinquent. Other lenders will not accept the file until the loan is delinquent.
From my experience, you should wait. If your current on your mortgage, the likelihood of your lender believing you hardship is SLIM and will get denied.

Q8. Why would a mortgage company agree to accept a short sale?
A. There are actually several reasons why a mortgage company would approve a short sale payoff, including the following:

Q10. I have three loans, can I still do a short sale?
A. Yes, but it is very difficult but doable.

Q11. My property is in rough shape and needs work, can I still do a short sale?
A. Absolutely. In fact, lenders are more motivated to do a short sale on a property that needs work than on a property that doesn’t. The lender knows the risk of loss goes up when they foreclose on a property that needs lots of work.
Aside from expense of completing the work, lenders are simply not set up to get the work done. They are in the loan business, not the fix it business.