Foreclosure is NOT the ONLY Solution!
Do not simply walk away and/or just wait for your home to be foreclosed. Banks don’t want your home any more than you want to lose your home. Banks are OVERWHELMED with foreclosures. As foreclosures increase in California, home values have taken a nose dive.
In our experience tells us there are nearly as many different circumstances and situations as there are families and homes in distress.
THIS MAY BE THE SOLUTION YOU’VE BEEN LOOKING FOR
It’s Called A
SHORT SALE
So, What Is A Short Sale?
A short sale is an agreement between the homeowner and the lender (also known as the lien holder, mortgage holder, note holder or bank), to accept an offer for less than the total amount owed on the home. The “deficiency” is the difference between the amount owed and what the bank collects at the sale of the home.
Despite Popular Belief
YOU DO NOT HAVE TO BE MONTHS BEHIND ON YOUR
MORTGAGE TO REQUEST A SHORT SALE
You must only demonstrate that your house cannot be
sold for what you owe and you are in a financial hardship
What A Short Sale is NOT
Many Realtors and some investors throw the term around loosely as if it only means a sale under market value.
NO!!!
• A Short Sale is NOT a bank owned (foreclosed) house.
• A Short Sale is NOT a seller deciding to lower their price and take less profit.
• A Short Sale is NOT a seller that owns their home free and clear and sells the property thousands under market
To be a Short Sale the BANK must be getting “shorted”.
SHORT SALE vs FORECLOSURE
Don’t be misled in to thinking that a short sale is the same as a foreclosure. It simply is not.
In a foreclosure, the homeowner falls several months behind on their payments. After three months of payments have elapsed unpaid, the lender may file a Notice of Default at the County Recorders Office. The homeowner is now “in default” on their mortgage. After an additional 90 days the lender may file a Notice of Trustee Sale. 21 Days after the Notice of Trustee Sale is filed, the lender can take the home to public auction - usually on the Court House Steps at the County Building - and if no other biders outbid the lender, the house will be taken by the bank as “Real Estate Owned” and then be brought up for sale by the lender.
*Note: California is a “non Judicial” State and there is no court action required by lenders to embark upon the foreclosure path. There is only the filing of legal documents at the County Recorder and Notice made to the Homeowner required in the non judicial process.
Once the home has gone to foreclosure,
THE BANK PURSUES THE HOMEOWNER FOR THE DEFICIENCY!
Don’t believe us? Just ask someone who has gone through a foreclosure and they will likely tell you they were forced to file bankruptcy in order to get out of paying the deficiency.
In California there IS an exemption for any homeowner facing foreclosure whose loans are the original Purchase Money Mortgage(s) they used to buy the home: That is: the proceeds from the loan went to escrow and to the seller from whom the home was originally purchased.
These are called “Purchase Money Mortgages” and they are defined by CA Civil Code as “Non Recourse” which means, specifically, that the lender cannot pursue any sort of deficiency judgment or collection action BEYOND the TAKING of the PROPERTY.
However, these rules only apply to mortgages used to purchase your home.
They do NOT apply to refinances or any other type of loans: Helocs, Home Equity loans, lines of credit, or additional junior liens (2nd mortgages etc).
With a Short Sale, we negotiate with the lender to accept a payoff and consider the debt “settled”.
The final result of any particular short sale will depend on a considerable set of variables:
They include such things as:
past payment history, length of term of the mortgage hardhips or extenuating circumstances of the homeowner (death of a family member, loss of a job, divorce, or the extended illness of a family member are all examples of hardships which lenders will consider when reviewing a file for short sale.
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