June 27th, 2020
What are the advantages of choosing a Short Sale
1.) Less Damaging to Credit Rating: A Foreclosure will severely damage ones credit rating for 7 years, but a Short Sale is less damaging and its effect does not last as long.
2.) Major Banks are Encouraging Palos Verdes Short Sales over Foreclosure: Fannie Mae (FNMA) recently changed their underwriting policy so that a past home owner now has to wait 5 years after a Foreclosure before FNMA will underwrite a new loan. If the homeowner conducted a Short Sale the wait time is just 2 Years! Freddie Mac also offers participating Banks a $2,200 incentive to conduct a Short Sale versus Foreclosure.
3.) Probable Relief from HELOC 2nd Mortgage: When the 1st Mortgage Bank forecloses on the Palos Verdes Short Sales home, the 2nd TD HELOC loan is not deleted from your debt. The 2nd TD HELOC Mortgage Bank may take legal means to collect their debt after the Foreclosure. With a Short Sale, we negotiate with both lenders to highly reduce or totally eliminate the HELOC loan debt.
4.) Dignified Solution: With a Short Sale, we sell your Palos Verdes Short Sales home just like your neighbors have done. It’s a dignified resolution to a tough situation. On the other hand, after a Foreclosure, a Sheriff performs a lock out, the grass turns brown, and a Bank Sales Rep places ‘Bank Foreclosure For Sale’ signs in front of the property for your neighbors to see.
5.) Much Shorter Delay to Renewed Loan Worthiness: We have established an association with a National Credit Restoration firm. This firm has been able to make major improvements to the credit ratings of our past Palos Verdes Short Sales clients, within months. But they have extreme difficulty in making improvements to damaged on credit reports resulting from Foreclosure.
6.) “Cash for Cooperation”: Some of the banks we work with are now offering home owners with Palos Verdes Short Sales, a Cash incentive in order to Cooperate with a short sale, versus allowing the property to be Foreclosed on by the Bank. Which Banks and amount of Cash offered, is on a case by case basis.
7.) Breaking news: June 1, 2012, the 3 major credit reporting agencies have announced they will change the impact of short sales on a borrower’s credit (assuming they missed no payments and weren’t late) to a ‘neutral’ . Meaning little to no negative credit ramifications.
Now this is REALLY important. Listen up because this could effect you for decades! Do not fall into the Loan Modification Trap. This is exactly where lenders want you. They can’t wait to lull you into this trap to get you past the date when the 2007 Mortgage Debt Relief Act will expire. Consider this, let’s say you bought your house in the 4th quarter of 2006, the peak of the market here for Palos Verdes homes. Let’s further assume you bought your home for $1,200,000 and have $960,000 loan that’s in default. In many cases, homes here in the South Bay area have dropped about 25-40% since the peak of the market, so even if your home dropped 30% in value, that $1,200,000 home is worth around $840,000. Why in the world do you want to do a loan modification? That would economic stupidity! Does that $960,000 loan go away? NO. Is the bank going to write that loan down for you? ARE YOU NUTS? And what does that loan mod do for you anyway? How many years is it going to take for your house, now worth $840,000 to appreciate to $960,000, let alone $1,200,000? You would have to be a fool to do a loan mod! And what’s worse, is that doing a loan mod doesn’t help your credit standing any more than doing the smart thing – do a short sale! Get rid of that toxic loan and indebtedness. Then go out and rent for a bit, the same home you have now for likely less money than what your loan payments are. Get yourself back on track with your credit and then go out in a year or two and buy the same darn house you’re in now for that $840,000! Loan mod? Really!?
For a private and confidential meeting to discuss your options and discover strategies to maximize your interests, contact me by phone or email. George Fotion, Call Realty Company. Your contact information will remain private and will not be shared with ANYONE!
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