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Short Sales Explanation

by Doug & Gwen Campbell at Sun Bay Associates

Last time we talked about the merits of a short sale vs. a forebearance of mortgage.  Today we will go into the short sale process a bit.

 

The short sale option is something that most borrowers do not know about and many realtors do not want to deal with because of the length of time to complete such a transaction.  Under the best of situations, a short sale can take three months to complete and it is not unusual for a short sale to drag on for five or six months before closing. 

 

In the past, a bank would require that the borrower/homeowner, be behind by several months before even considering a short sale.  However, due to the changing market and the simply overwhelming number of houses in pre-foreclosure or outright foreclosure, some banks are accepting a short sale transaction before the homeowner is actually in arrears.  There are several items that must be provided to the bank to get a short sale approved.  Among these items are the previous two years tax returns, pay stubs for the past 2-3 months, bank statements for the past 2-3 months, a financial worksheet showing all assets and liabilities, including monthly payments, all sources of income and more.

 

A key advantage to a short sale, especially when considering foreclosure, is that a short sale might not tarnish your credit rating, where a foreclosure can affect your credit rating for seven years or much longer.

 

There are short sale specialists available to guide you through the process.  It may take 3 to six months or even longer, depending on the bank, but the time and effort may be worth it for the homeowner whose alternative is foreclosure.  To learn more about if a short sale is the right option for you, contact a reliable realtor and ask for a review.  If you want to get a jump start and find out if a short sale may be the option for you, go to www.YourHouseOptions.com.  Your inquiry will be handled with the utmost respect and integrity.

 

Next time we will address a deed in lieu of foreclosure.

 

Remember, there are always options.  Foreclosure does not have to be the only way out of a temporary financial difficulty.

Merits of forebearance vs. a short sale

by Doug & Gwen Campbell at Sun Bay Associates

 

Last time we talked about the forebearance of mortgage agreement.  Today we will briefly address the merits of forebearance compared to a short sale.  For specifics, be sure to consult a real estate attorney in your area.

 

The biggest benefit to a forebearance agreement is the postponement of the monthly mortgage payment and the potential to keep the house if all agreed payments can be made.  However, if the borrower cannot make the agreed payments, and repay the delinquent balance within two years (or the agreed time frame) the house will still go into foreclosure.  Also, interest continues to accrue on the outstanding loan during the forebearance period.

 

The main benefit of a short sale is having the bank agree to settle the mortgage for less than the amount owed.  This may even preserve the borrower-homeowner’s credit rating.  The greatest disadvantage to a short sale is that because it is dependent on the bank to approve acceptance of an offer for less than the amount owed on the mortgage, this process may take months.  The borrower’s credit rating may be negatively affected, but usually for two years or less as compared to seven years or longer for a foreclosure.

 

Next time, we will address the short sale process in a bit more detail..

 

Remember, there are options to foreclosure.  To learn more about a short sale, visit www.YourHouseOptions.com.

 

 

 

Forebearance of Mortgage Agreement

by Doug & Gwen Campbell at Sun Bay Associates

Forebearance agreement

 

Previously, we talked about different options to avoid foreclosure on a mortgage.  Today we will address a forebearance of mortgage agreement.  This is not a definitive discussion and we strongly suggest you consult with an expert in your area. 

 

A forebearance agreement is only one of several ways to avoid foreclosure.  It is simply an agreement between the bank and the borrower or homeowner to delay payment of the monthly payment for a specified amount of time.  The borrower usually has to be able to make a payment of at least 50% of the delinquent amount and can pay back the full amount due within two years.  If there is a lot of equity in the house, the borrower might be able to refinance the house to cover the amount due.  Refinancing could salvage the house, but is very likely to result in a much higher interest rate on the new mortgage.  The higher interest rate may be worth it to save the equity in the house.  Of course, if there is little or no equity in the house, refinancing is not likely.

 

Unfortunately, national statistics show that it is very likely that the borrower/homeowner who has fallen behind on the present mortgage is going to default on the new note within just a few months to a year.

 

Next time, we will address the relative merits of seeking a forebearance agreement or going with the short sale option.  To learn more about the short sale option to avoid foreclosure, visit www.YourHouseOptions.com.

You Have Options

by Doug & Gwen Campbell at Sun Bay Associates

Do you live in the greater Tampa Bay area and love it, but are having a hard time making your mortgage payments?  If you purchased a house in the last few years when the market was hot and now that the market has cooled off you might have a house with no equity that is simply not worth what it cost only a couple years ago.  With the economy in the condition it is in now, people are struggling to make their mortgage payments.  No matter the reason, if you can’t make the mortgage payments you are in a very stressful situation.

 

There are options, however, to avoid foreclosure.  Among the options available are:  forebearance; deed in lieu of  foreclosure; restructured loan;  renting the property, or, there may be an option most people don’t even consider, called a short sale.  This is when the house is worth less than what is currently owed to the bank, based on the current market conditions, there is no chance of selling it for enough to recoup the original investment, and the bank will agree to it. 

 

In the next few blogs we will discuss a little more of each of these options.  In our next discussion we will address a forebearance of mortgage agreement.

 

Remember, there are always options, foreclosure does not have to be the only way out of a temporary financial difficulty.  Visit www.YourHouseOptions.com for more information.

Displaying blog entries 1-4 of 4

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Photo of Gwen and  Doug Campbell - Sun Bay Realty Group Real Estate
Gwen and Doug Campbell - Sun Bay Realty Group
at Keller Williams Realty
30522 US Hwy 19N, Suite 107 S
Palm Harbor FL 34684
Doug's Cell 727-741-4189
Gwen's Cell 727-741-7260
Fax: 888-447-7908