Property in Lieu of Foreclosure is Called a Short Sale

Once the real estate broker adds up all the costs, the amount owed can be determined, if necessary get the advice from a real estate attorney. The lender will need to know the estimated proceeds of the sale minus the total amount owed on the mortgage loan.

Before you can sell the property you will need to come to an agreed upon lower selling price of the home, the value will be much less than the house is worth and the selling price will reflect this. When the mortgage lender approves you will be saved from bankruptcy which can really be damaging to your credit.

Authorizing disclosure of your loan information is the first step, these documents will have your property information, address and loan number that will be assessed by an attorney, title company or RE broker. California real estate done properly can save you much headaches and frustration.  If you are not approved for a short sale you may want to consider a short payoff, lender liability lawsuits or other loan workouts.

It also may be advisable to stay current with your first loan even if you become delinquent on your second so that your agent has time to workout the loan options for you to avoid foreclosure. Some may state that you should release your deficiency balance and then request a borrower contribute a percentage of the deficiency, in the case of you having future assets or income you may need to seek the counsel of a lender liability attorney to be sure.

The HAFA program simplifies and streamlines the use of short sale by stating that the short sale must be an arm’s length transaction with the net sale proceeds after deductions for selling costs be applied to a discounted mortgage payoff acceptable to the servicer. It is also advised that the short payoff be accepted in full satisfaction of the total amount due on the first mortgage.

As you are well aware short sales and deed-in-lieu are complex transactions involving coordinating and cooperating from a number of parties including, appraisers, borrower’s buyers, real estate brokers, agents, title agencies, mortgage insurance companies and other lien holders.

Your success will be determined by Realtors who can get short sales under contract, negotiate solid deals with the lenders to get the properties closed.  Make sure you are protected during the short sale transaction by asking the right questions and staying informed about the paperwork received by your escrow agent.

Short sales may not be an easy fix and it could be your best option but it is important to do your due diligence getting answers and protecting your self by using a licensed Real Estate Attorney.

Find More Agent Realtors Articles