When we first started doing short sales back in 2008 it was a new word and frankly a new world. Unfortunately, while there are a few really good things that have changed since 2008, there are a lot more similarities to the experience as back then. It’s worth looking at what has changed and what hasn’t to really educate ourselves on the process.
What’s New In 2018 For Short Sales
Not much really. There continues to be push for legislation that forces banks to act properly and yet the banks continue to use these new guidelines as ways to take advantage of the public. Now things are different from state to state, Florida real estate agents have a completely different short sale process than Georgia Real Estate agents to be sure.
To be fair we’re saying “banks” but we’re really talking about predatory payment collectors. Ocwen and Greentree are still names that make you cry, but smaller banks such as M&T are getting in on the mix. As recently as this month I heard about a home owner that was had missed only 1 payment back 2 years ago and now they want to foreclose.
Banks Foreclose for different reasons, but their systems are broken. Most of the banks are using systems that require yes/no responses with a check mark. If your hardship doesn’t fit their system then you might not be approved. The only thing understanding this process really does is give you insight, it rarely leads to success.
What hasn’t Changed In Short Sale In 2018
Short Sale Are Still A Viable Option
Short sales are still a “go-to” option to save your home when you get behind on the payments and are upside down. I think a lot of home sellers don’t realize that they are right side up. The biggest problem with short sales are that you have to catch them early.
Short Sales Require Time
As soon as you miss a payment you’ve given the control over to the bank. You need to think about how to save the home if possible and if you’re unemployed you should already be thinking about the short sale before you’re 3 months behind and the bank is already pursuing the foreclosure. In Georgia, you can be foreclosed on in as little as 30 days.
In addition to early notice, short sales also require time for the bank to process them. Even though many have sped up their turn around time, they are still running 60 to 90 days out from the time they receive an offer.
Your Hardship Still Really Matters
Gone are the days when you could just short sale because the home was upside down and you felt like it was a good idea. Your hardship usually has to fall into one of these categories:
- Death of a borrower
- Divorce from a borrower
- Unemployment of a borrower
Notice you can’t convince a bank that you have a hardship if your husband loses his job but wasn’t on the loan. In order for it to “count” the person experiencing the hardship has to be a borrower
Even Without Incentives, It’s Still A Good Option
With the short sale incentives from a few years ago like HAFA, it was a more welcome option to do a short sale. You could limit the damage on your credit, have a somewhat more controlled process and get paid at the same time. While those incentives are gone, it still beats filing bankruptcy at least in terms of the damage it does to your financial health.