Lori Brown a CDPE agent at RE/MAX Advisors, has solved another short sale problem for a Homeowner facing foreclosure. Lori Brown has successfully negotiated and closed a short sale transaction where a lender (Bank of America) accepted a “short” amount on the sale of this home, saving the sellers from being another Michigan Foreclosure statistic.
The sellers were in default and the homeowner was facing Foreclosure in Michigan, even had a Sheriffs Sale date. After many negotiations with the bank with no solutions, the home owners contacted Lori Brownto negotiate a Short Sale on their behalf. The process was not easy, but with the strong negotiating powers, problem solving and a comprehensive marketing process, Lori Brown achieved the difficult approval to close the home.
As with all Southeastern Michigan short sale approvals, there must be a ready & willing buyer to purchase the home at what the bank considers “fair market value” based on their appraisers values. These sellers opted to short sale their home rather than allow a Foreclosure in hopes of having a better credit score and the ability to purchase Michigan Real Estate again in approximately 2 years.
The most prevalent question and one that continues to permeate the industry is: “Why should a seller go through the short sale process rather than letting their house be foreclosed upon?” In almost all instances in which a potential seller is contemplating whether they should short sell their house or let it go through the foreclosure process, a short sale is the much better option. The following are examples to consider:
Example A- Short Sale..............
Mr. Jones owns a home in which he has a mortgage balance of $220,000 and a current market value of $150,000. Mr. Jones has elected to short sell his property. His Realtor successfully obtains a buyer who puts forth an offer price of $120,000 (80% current market value according to Realty Trac Foreclosure Report). After reviewing the buyers offer and the financial hardship information from Mr. Jones, Mr. Jones’s bank agrees to accept the short payoff of $120,000 which would leave a deficiency balance of $100,000.
The transaction closes and is final. Mr. Jones then pulls his credit report 30 days after the transaction takes place. On the report he notices that the mortgage trade line states “Mortgage debt was settled for less than full” and the balance on the mortgage is $0. Mr. Jones is now on the road to financial recovery.
Example B- Foreclosure............
For the ease of illustration we will use the same value and mortgage debt amounts as in Example A. However, Mr. Jones has elected to forgo the short sale process and let the bank foreclose on the property. The bank holding his mortgage facilitates the proper legal procedures to foreclose on the property, all of which are costly. Mr. Jones is notified and his property foreclosed upon of which is taken back by the bank to sell as an REO.
Six months later, the bank finally sells Mr. Jones’s home only they sell it for $90,000 (60% of current market value according to Realty Trac Foreclosure report). Remember, as a short sale, the home would have sold for $120,000 keeping the deficiency to $100,000. In addition to the deficiency now being $130,000, the bank has elected to add on legal costs of $15,000 and asset preservation costs of another $5000 for a total deficiency liability of $150,000. Mr. Jones pulls his credit report 30 days after being notified that the bank has sold his property and of his liability.
On the report he notices that the mortgage trade line states “Foreclosure”
The Best Option is clear, while the financial and credit advantages are clear when choosing a short sale over a foreclosure, other advantages are sometimes overlooked. The most important of all of them is maintaining the seller’s dignity and peace of mind. There are many stories of families having to leave their homes because of a Sheriffs order or some other type of legal action. The short sale process alleviates this negative social impact. The process puts the control back in the seller’s hands so that they can get back on the road to financial recovery and start providing for their families. In the battle of the two evils, a short sale always wins!!!
I can help you short sale your property and get back on your feet. Send me an email at Lori@LoriBrownSales.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me, Lori Brown at 810-543-8896
View my homes for sale at www.LoriBrownSales.com
Thanks for reading, Lori Brown.
Lori Brown is a CDPE-Realtor at RE/MAX Advisors.
Office 586-725-1900 Email Lori@LoriBrownSales.com
Lori Brown specializes in assisting homeowners facing financial difficulties in Macomb and St. Clair Counties, including all areas of Southeastern Michigan. By exploring options to avoid foreclosure through dignified solutions including the short sales process, clients receive sound real estate advice.
I am currently offering my services in Bruce Township, Washington Township, Armada, Ray Township, Richmond, Lenox, Shelby Township, Macomb Township, Chesterfield Township, Sterling Heights, Clinton Township, and Harrison Township in Macomb County and Berlin Township, Riley Township, Wales Township, Kimball Township, Port Huron, Columbus Township, St. Clair Township, Casco Township, China & East China Townships, Ira Township, Cottrellville Township, Clay Township and Algonac in the St. Clair County areas.
IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. The above brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan