Frequent Asked Questions

Is a short sale right for me?
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 and for you, much better than a foreclosure.
Can I do a short sale if I have more than one loan?
Yes, no problem. Any lien or encumbrance on a property can be ’short sold’, as long as all senior liens agree to it.
Why would my lender agree to a Short Sale?
If it can be proved that it is in the lenders best financial interest, then they will most likely do a short sale. They must come to the conclusion that they will lose more money by carrying out the foreclosure.

* It should be noted that the lender is under NO obligation to do a short sale.
What is a Hardship that justifies a short sale?
  • Reduced Income or Unemployment.
  • Inability to work due to health reasons.
  • Separation or Divorce.
  • Medical Bills.
  • Business Failure.
  • Death of a Spouse.
  • Adjustment in mortgage payment or unforeseen increase in your monthly expenses.
  • Any other circumstance that cripples your ability to repay your mortgage.
Does It Matter Who Does a Short Sale?
Very much so. With timelines and auction dates, you typically only have one shot at a short sale. Working with us ensures that the ‘one shot’ you get is handled by experienced professionals. We have relationships with many of the biggest lenders, and we a very high success rate. We have done HUNDREDS of short sales nationwide, and collect compensation from the lender only when a deal closes – so we must be effective.
What other options do I have other than a short sale?
Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.
Benefit: Does not require the mortgage company or lender’s approval.
Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
Benefit: Allows the homeowner to make back payments over time.
Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.
Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan.
Drawback: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.
Benefit: Allows homeowner to keep property indefinitely.

Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a ‘friendly foreclosure’, a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.
Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Bankruptcy
Many have considered and marketed bankruptcy as a ‘foreclosure solution,’ but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.
Benefit: Does not require lender approval.
Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.
Benefit: In some cases, this will lower payments.
Drawback: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.
Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
Drawback: Must be active military to qualify.
How long does the short sale process take?
Generally around 60 days, though there have been deals closed in only a few weeks and others that take many months. Factors include lender involved, loan quantity, document collection times, and seller response times.
What’s the difference between a Short Sale and a Foreclosure?
A short sale can lower your credit score as little as 50 points, whereas a foreclosure can lower it as many as 300 points. After a short sale, your credit report will list it as ‘paid in full, settled’ or ‘paid as negotiated’ and it can last for up to two years on your report. A foreclosure will be noted as just that, and can last up to ten years. Worth noting, laws differ state-to-state. It is important to consult a licensed attorney to review the respective laws in your area.

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