One of our most recent posts (“Back on the Market”) was about 2090 Brickton Station and how it come back on the market. Are Banks Still Accepting Short Sales? YES! The challenge with short sales has actually never been the bank’s willingness to do them, it’s been either the seller’s lack of knowledge (or the listing agent they chose) or the buyer backing out of the transaction. This is why the Jarvis Team has a 90% success rate with short sales.
I know some people wonder Are Banks Still Accepting Short Sales? because they heard that the tax exemption will end or that HAFA ended but the truth is, that they are still vaiable. They are and they probably will for at least another year or so.
It’s still the best option for those under water and struggling to make the mortgage payments. Obviously, selling traditionally is the best but a short sale is the next best option for those in a hardship.
Just because banks are still accepting short sales doesn’t mean they are easy. In fact, although the process is more streamline, the qualifications are a bit tougher. You need to be able to demonstrate you cannot afford the home with your income (do not count savings).
For the longest time it seemed like if you filed for bankruptcy there didn’t seem to be any reason to do a short sale. Afterall, your debt is gone and that’s kind of the whole point of the short sale is to get the debt, gone. In this case it’s not all about the debt. Bankruptcy affects your credit in a HUGE way, it pretty much eliminates you from buying another home with financing (and credit cards, etc) for at least 3 or 4 years (3 years from discharge).
A foreclosure will prevent you from buying a home with financing for up to 7 years!
You might think to yourself, “well I’ll be sitting out for 7 years due to my bankruptcy, so a foreclosure can’t hurt me.” If you thought that, you’d be wrong. You might have noticed some of your neighbors have no jobs and are at home and yet no one has evicted them. It can be a big win for the bank, they have someone take care of the property and they’ll get to foreclosing when they feel like it. The result? Let’s go to an example:
Say you filed bankruptcy in 2006. The bank took their sweet time foreclosing, so your debt slate is clean but the home still remains an “asset,” since the bank never took back possession. Let’s say you get clear in 4 years, sometime in 2010. The bank now decides to foreclose because the see the market starting to come back. Yep, you guessed it, now you have a bankruptcy that has faded away but a new foreclosure hitting your credit as if it just happened. So when can you buy again? Yep, the earliest maybe 2014 with some programs, but if Fannie Mae still exists you won’t get a loan from them until 2017.
After a Bankruptcy? Short Sale or Foreclosure?
The answer is pretty simple. You should short sale, there’s almost no downside in this scenario except the time spent. Not to mention the short sale does the least overall damage to your long term credit.
We’re usually focused on answering questions here, but although we’re not happen at the circumstance we do want to alert you to a great property that has popped back up on the market.
2090 Brickton Station, Buford, GA 30519 - This short sale is approved and ready to close. It’s a large, wide open home with some minor repairs needed. It features 4 large bedrooms and 2.5 baths, but it’s the huge kitchen that opens completely to the family room that will have you excited. There’s a nice large room on the main level as well.
This home goes to the Buford high school district and is in a very convenient neighborhood. Check it out before it is under contract like so many other homes.
Every client we get to help we approach with an open mind and heart, but clients who have Flagstar, Ocwen and Suntrust we have a special place in our heart. If we’re completely honest those are just the files we don’t want to work. Add on top of that, Freddie Mac and you’re one Google search away from find out these are “deadly” combinations for home owners to avoid foreclosure. Continue reading →
I had a recent conversation with a negotiator that was servicing a file with Fannie Mae and told me the ways you can get an automatic short sale approval from Fannie Mae. I should correct myself and say “approved of” but only the value and the offer are needed if you have one of these 4 circumstances. In each instance, the borrower can remain current if they choose and still qualify. Continue reading →
We bring you another success story this time featuring Wells Fargo and their servicer ASC. This particular home was a condo in Decatur with 2 liens on it. To top it off, the home did not have an air condition and had not been updated in 20+ years of ownership. The owner had lost his job and frankly had been struggling for some time. When he called it was only a short time before the home would be foreclosed. Unlike most homes in this price point (under $50K) this one could not be rented due to HOA restrictions. Continue reading →
This short sale success story is special to us. This couple had not only lost their job but had mounting medical bills as well as taking additional responsibilities as caregivers for some of their Grandchildren. It was one of those short sales in Buford that we just say, ironically, “Praise the Lord for short sales.”
The lender was M&T with Bayview Servicing servicing the loan. Even with a clear hardship this short sale faced several problems. Continue reading →
This site has been live for almost 4 years and we failed to tell you of our success. Not to boast but rather to share the short sale success stories we’ve had (and failures) so that you can see what will work for you or not.
One of the most memorable stories was a home for sale in Buford. It was a Chase short sale and our client had lost his job. Just months prior he was working hand in hand with a prominent author in leadership. Unfortunately for him, his boss sold the company which left him as an odd man out. After several months of trying to make ends meet he could no longer afford the home. This continued for over a year when Chase told him about a short sale. Continue reading →
In a short sale, it’s a pretty common question to ask whether or not, Does Freddie Mac Pursue Deficiency Judgments? Luckily for us there’s a clear definition already out there for this.
Chapter 55.3.1: IRS Form 1099-C, Cancellation of Debt (04/25/06) states that the Servicer must report cancellations of Borrowers’ mortgage debt on IRS Form 1099-C, Cancellation of Debt, as required by the Internal Revenue Code. Under 55.3.1.d .6 it defines a short sale (not by name) as “A discharge of indebtedness under an agreement with the debtor to cancel the debt at less than full consideration.
Most of the time you want to get it in writing and possibly reviewed by an attorney but this is pretty clear that a short sale completely cancels the debt. The way it’s worded above, it’s worth pointing out that your credit report often reports a short sale this way as well.
Seterus Short Sales are thankfully much more rare than many other “servicers” or banks. Seterus is one of those “banks” that is more like a credit union or small group that doesn’t think Short Sales deserve the attention of their staff or processes. After all, Seterus doesn’t make money on short sales, so why bother. Most often you’ll have to escalate or find work around when dealing with them . Allow up to 4 months from the initial offer from a buyer to an approval letter. You can (we have) close with them, but don’t expect it to be a smooth ride.