Winfield Realty is experienced with Short Sales as our experience and background for the last 30 years in the loan default industry is unprecedented. Bottom line, we know how to get it done. But we can’t do it unless you are 100% on board and understand the process. Below is a summary of what you must understand to move forward.
Historically it was nearly impossible to get a lender to approve a short sale. With the Housing crises of 2008 that has all changed with the Federal Government offering incentives to lenders and owners to use short sales as a method of easing the housing crisis.
It is important to understand these programs are temporary and could go away as swiftly as the government implemented them. So as a seller you must be proactive and not procrastinate.
- Do not ignore any documents you receive from the lender or their representative. Contact them immediately and open up a dialogue.
- Contact an attorney, make sure they have done short sales before.
- NEVER, NEVER, NEVER give anyone money up front to help you with a short sale or to some who says they can save your home from Foreclosure. They will get paid at closing if they are successful.
IN THE STATE OF ILLINOIS FORECLOSURE RESCUE FIRMS MUST BE LICENSED WITH THE STATE. CONTACT LISA MADIGANS OFFICE TO MAKE SURE THEY ARE LICENSED AND IN GOOD STANDING.
The short sale process is a paper work nightmare with very strict date deadlines. The Federal Government has turned to the Real Estate Profession to educate and work with sellers to facilitate a successful short sale.
Advantages of short selling to the seller:
- Foreclosure does not appear on credit report
- Relocation assistance for current owner
- orderly transition of property, no ugly foreclosure or eviction
- Foreclosure process postponed
- less stressful on family
Advantages to lender:
- Government pays lender for each successful short sale
- no foreclosure or eviction costs to lender
- less impact on lenders financial statements and loan loss reserves
- liquidates non performing loan faster
There are two basic types of short sales. Traditional and Pre-approved. To know which one you qualify for you need to know who owns your mortgage (investor). See attached links to look up your investor: www.fanniemae.com, www.freddiemac.com
If your mortgage is owned by FNMA, FHLMC or the Federal Treasury then you need to follow the short sale requirements in HAMP called HAFA. Lenders that received Federal Bailout money TARP must conform to HAMP and HAFA. Not all investors are required to participate.
You can get pre-qualified for HAFA at: www.makinghomeaffordable.gov and then contact Winfield Realty to help you process all the paper work and get it submitted timely. There are date deadlines that if missed disqualify you from the program. Don’t submit any documents unless you have a Realtor. The documents require paper work only a Realtor can Provide. What ever Realtor you Select make sure they have been to the HAMP/HAFA training module.
Under HAFA if you qualify the sort sale approval it is an expedited process with pre-approved listing prices which allow the sale to close within 30-60 days. Keep in mind it’s an as-is sale, so if your home needs repairs for loan approval your buyer may not get loan approval. So its important your listing agent understands the loan approval process and the minimum property condition requirements for loan approval so you don’t accept a contract that will crash. Only contracts should be submitted that are 100% solid gold or the lender can reject them. This is not a throw it against the wall to see if it sticks process you can jeopardize everything if you approach it that way.
Traditional short sales are just what it sounds like. The investor that owns your loan does not have to follow HAMP or HAFA. Non preforming loans sold in pools to investors typically fall into this category. Some of these investors may have their own Pre-approved short sale program that looks similar to a the HAFA program. However the foreclosure process is not postponed and it can take anywhere from 3 t0 12 months to get a sale approved. It’s a race against the clock, if the foreclosure finishes first even though the lender has all your short sale paper work, you are out of luck. Close to 33% of all homes foreclosed home are on homeowners that had short sale in process but the foreclosure was finished first.
Let us help contact us at: kwolf@winfield-realty.com
