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That dream home in California has become a nightmare. Interest-only loans
provided a way for anyone to own a perfect little palace with all the
trimmings, but after a few years the rates soared and the payments
became too much to bear. Four of the top ten metropolitan foreclosure
areas are located in California. But there is hope. While you’re in the
pre-foreclosure stage, a real estate short sale may be the financial
savior that you need.
The housing boom of several years ago in California caused many to get
in far over their heads. What seemed like a steal for a home in
paradise became a bid for a shack in the underworld once
adjustable-rate mortgages shot through the roof. If you find yourself in this situation, the short sale may be your best friend.
Many times pre-foreclosure happens because of a sudden and drastic
change in your financial situation. Everything’s been downsized, you’re
bringing home less money and your payments have skyrocketed. Before you
realize what’s happened, you’ve fallen a month or so behind on your mortgage and have been notified of the default on your loan. Your world
is shaking, but there’s no earthquake being recorded. Fortunately, this
financial hardship will most likely mean that you are eligible for a
real estate short sale.
When the amount you owe exceeds the value of your home but you still
need to sell, you are talking about a short sale. While still in the
pre-foreclosure stage, a deal is arranged with the lenders
wherein you would pay less than what is owed on the property. The
difference is generally forgiven; though there are pitfalls to avoid.
It’s important to be well aware of any possible legal consequences
before committing to a short sale. Be sure that every little detail
regarding the release of debt
is in writing. Make sure that the lender is not going to force payment
of the remainder after the short sale, especially if you have other
assets to protect. There have been instances when sellers have been
notified that the lender will seek repayment of the debt after the
short sale is complete.
Lenders will usually consider a short sale only when you are at least
one month in default on your mortgage. It’s also important to have a
buyer at hand who is financially able to take on the responsibility.
Much documentation is required as proof of your inability to make
payments because of your financial hardships. These may include tax
returns with W-2s for the last couple of years, bank statements of the
last few months and recent pay stubs. A copy of your ‘deed of trust’
and ‘mortgage note’ is also required. All of these documents will
combine to form an image of your present financial state.
A home in pre-foreclosure need not be the proverbial financial
guillotine that it appears to be. By choosing the option of a short
sale you can avoid proceeding into the dangerous zone of foreclosure.
Yes, it will affect your credit score. But it’s a far brighter way out
of the dark tunnel of mortgage debt than a foreclosure. As always, when
considering options such as this, do your homework and find out the
best option for you.
Technorati Tags: Short Sales, Pre-foreclosure
About the Author:Mark and Kari Shea, of Shea Real Estate & Investment Group,
are accomplished business professionals and community leaders in the
San Diego, California area. With more than 45 years of collective
sales, marketing and consulting experience; they are master negotiators
in the marketing and selling of real properties. Learn more about their
services at: www.shea-realestate.com.
Short Sales Save You from Pre-foreclosure Woes
That dream home in California has become a nightmare. Interest-only loans
provided a way for anyone to own a perfect little palace with all the
trimmings, but after a few years the rates soared and the payments
became too much to bear. Four of the top ten metropolitan foreclosure
areas are located in California. But there is hope. While you’re in the
pre-foreclosure stage, a real estate short sale may be the financial
savior that you need.
The housing boom of several years ago in California caused many to get
in far over their heads. What seemed like a steal for a home in
paradise became a bid for a shack in the underworld once
adjustable-rate mortgages shot through the roof. If you find yourself in this situation, the short sale may be your best friend.
Many times pre-foreclosure happens because of a sudden and drastic
change in your financial situation. Everything’s been downsized, you’re
bringing home less money and your payments have skyrocketed. Before you
realize what’s happened, you’ve fallen a month or so behind on your
mortgage and have been notified of the default on your loan. Your world
is shaking, but there’s no earthquake being recorded. Fortunately, this
financial hardship will most likely mean that you are eligible for a
real estate short sale.
When the amount you owe exceeds the value of your home but you still
need to sell, you are talking about a short sale. While still in the
pre-foreclosure stage, a deal is arranged with the lenders
wherein you would pay less than what is owed on the property. The
difference is generally forgiven; though there are pitfalls to avoid.
It’s important to be well aware of any possible legal consequences
before committing to a short sale. Be sure that every little detail
regarding the release of debt
is in writing. Make sure that the lender is not going to force payment
of the remainder after the short sale, especially if you have other
assets to protect. There have been instances when sellers have been
notified that the lender will seek repayment of the debt after the
short sale is complete.
Lenders will usually consider a short sale only when you are at least
one month in default on your mortgage. It’s also important to have a
buyer at hand who is financially able to take on the responsibility.
Much documentation is required as proof of your inability to make
payments because of your financial hardships. These may include tax
returns with W-2s for the last couple of years, bank statements of the
last few months and recent pay stubs. A copy of your ‘deed of trust’
and ‘mortgage note’ is also required. All of these documents will
combine to form an image of your present financial state.
A home in pre-foreclosure need not be the proverbial financial
guillotine that it appears to be. By choosing the option of a short
sale you can avoid proceeding into the dangerous zone of foreclosure.
Yes, it will affect your credit score. But it’s a far brighter way out
of the dark tunnel of mortgage debt than a foreclosure. As always, when
considering options such as this, do your homework and find out the
best option for you.
Technorati Tags: Short Sales, Pre-foreclosure
are accomplished business professionals and community leaders in the
San Diego, California area. With more than 45 years of collective
sales, marketing and consulting experience; they are master negotiators
in the marketing and selling of real properties. Learn more about their
services at: www.shea-realestate.com.
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