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What happens when a home has a mortgage that far exceeds it's value?
What can you do when you cannot afford the mortgage payment and your house cannot be sold to meet the balance owed?
One of the leading solutions to stop foreclosure today is a short sale. In a short sale, the lender agrees to accept the sale amount, even if it is less than what is owed on the mortgage. Upon completion, the Short Sale is reported to credit reporting agencies as mortgage paid as agreed for less than owed. Lenders are prohibited from pursuing a deficiency judgment against the homeowner, or of requiring the homeowner sign a promissory note for unpaid balances at completion of short sale of primary residence.
The primary differences between a Short Sale vs Foreclosure:
Short Sales: Negotiated settlement, seller's credit is bruised -- not ruined, no attorney fees, peace of mind, all liens are negotiated, you can obtain financing and buy a home within 1 business day of completion of short sale.
As a Las Vegas Certified Short Sale Specialist with a 100% success rate, my #1 priority is to help families get their life back to normal as quickly as possible. Part of that is enabling them to have the ability to own a home again. That's where a short sale can help. A successfully negotiated short sale allows you to be eligible for financing within 1 day of completion of a short sale, as opposed to five years after a foreclosure (seven years if the property is not your primary residence). A short sale, by itself, lowers your credit score by as little as 50 points, as opposed to anywhere from 250 to over 300 points in a foreclosure. A drop in credit due to a short sale can be recovered as quickly as one year, while a foreclosure will affect your credit negatively for at least three years. A foreclosure will be publicly recorded for 10 years.
Effective November 1st, 2012, NEW FNMA and FMAC guidelines streamline the short sale processes to prevent foreclosures and help communities stabilize.
These new guidelines streamline documentation requirements, waive deficiencies for borrowers that successfully complete a short sale and set standard payments for subordinate lien holders.
Servicers will be permitted to approve a short sale for borrowers who have certain hardships but have not yet gone into default. Those hardships include: the death of a borrower or co-borrower, divorce or legal separation, Illness or disability or a distant employment transfer to provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.
In addition, FNMA and FMAC are significantly reducing the documentation required to complete a short sale, including requiring no documentation of a borrower’s hardship 90 days or more delinquent and have a credit score lower than 620. This will remove barriers for those homeowners who are most in danger of foreclosure and increase servicer efficiency in completing a short sale.
FNMA and FMAC will also limit subordinate-
To schedule a complimentary consultation or for all the information about Nevada’s specific rules regarding deficiency judgements, deficiency waivers and the mortgage debt forgiveness act in effect from 2007 - 2012, call 702-677-8796 today. FREE Short Sale Pre-Pack kit specific to your lender will be furnished upon request when a short sale is determined to be the best solution. Visit:
Page Updated Last on: Sep 04, 2012