It is essential to know Short Sales Homeowner’s Road to Recovery! When a homeowner defaults on their mortgage, usually after missing 3-6 payments, the lender will initiate the foreclosure process. Foreclosure is the legal and professional process in which a lender obtains a court order terminating the equitable right to amortization from a mortgagor. In layman’s terms, a foreclosure is a legal process a lender must go through to repossess a property after a homeowner defaults on the terms of their mortgage.
Short Sales – Homeowner’s
Banks are not in the business of owning real estate, which is why every bank has some sort of sales of wealth management department dedicated specifically to liquidating non-performing assets. So as a homeowner, foreclosure doesn’t necessarily mean all hope is lost. One of the ways a lender can liquidate an underperforming or underperforming asset (mortgage) is by allowing a homeowner to short sales his property. Short Sale – Homeowner’s Road to Recovery!
Simply put, a short sale is when a lender agrees to accept an amount (payment) that is less than the full paid-off balance of a mortgage. A lender will consider short sales if that lender believes it is in their best financial interest. The average cost a lender faces in foreclosure on a property is estimated to be around $50,000. If you factor in attorney fees, court fees, property depreciation, missed mortgage payments (including interest, insurance, and taxes), property maintenance, and vacancy, it’s easy to see why a lender is willing to accept a short sale instead. of foreclosure on a property.
Short Sale qualifications may vary depending on the lender. However, most lenders will consider a Short Sale if:
• The homeowner faces legitimate financial difficulties. And is unable to pay monthly mortgage payments.
• The homeowner’s property has too much leverage (also known as negative equity); meaning their property is worth less than their current mortgage.
• The homeowner has missed several mortgage payments. Contrary to popular belief, a homeowner can still qualify for a short sale even if their mortgage payments are current. If the homeowner can prove that he is no longer able to make his mortgage payments due to financial difficulties, his lender may still consider a short sale. a lender can liquidate an underperforming or underperforming asset (mortgage) by allowing a homeowner to short his property. Sale – Homeowner’s Road.
Homeowner’s Road to Recovery
Once a homeowner believes they meet the requirements for a sale, they should start collecting the necessary paperwork. Often, the homeowner’s lender will have a Short Sale package with the requirements available on their website. Sale – Homeowner’s Road to Recovery!
1). Authorization to Disclosure – required by lenders to disclose information about your loan to third parties.
2). Hardship Letter – it is a letter from the homeowner explaining their current situation and giving the lender a better idea of what is really going on and why they should accept the Short Sale.
3). Financial Form – This form shows your lender your monthly income and monthly expenses to see if the homeowner is truly experiencing a hardship.
4). Bank statements for the last two months
5). Last two years of taxes.
6). Last two months’ payslips
For many homeowners, a short sale, if handled correctly, can start the road to recovery. I’ve seen many cases where a homeowner was given the impression that once the short sales are completed, they have nothing to worry about. If the homeowner can prove that he is no longer able to make his mortgage payments due to financial difficulties, his lender may still consider a short sale. a lender can liquidate an underperforming or underperforming asset (mortgage) is by allowing a homeowner to short sell his property. Sale – Homeowner’s Road.