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January 26th, 2009 by Temple City Tribune
These two words mean different things to different people; so don’t get upset if you are currently attempting to sell your home and doing so via the “Short Sale” process. When the news media is talking “Short Sale” they are referring to the stock market, meaning the pricing of stock being sold. This is a very short explanation, but it should solve some the questions that I have been receiving.
For nearly two years I have been writing about terrible loans, such as Adjustable Rate Mortgages, Interest Only or those very dangerous one-percent loans. In a few months many more people who have those types of loans will be facing the possibility of losing their homes, so steps to save your home should be taken as quickly as possible.
Before a property can go into foreclosure the lender must contact the homeowner to see if a workout program could be arranged, and that must be done prior to thirty-days of the property going into foreclosure. And, it must also be done in writing.
Our congressmen and women are trying to include those that may be losing their homes in the $700 billion dollar bailout, and it does appear that there will be some program that will help some of the people, but not all. But, what can those who are having problems making payments do now to either save their homes or possibly consider doing a “Short Sale” of the property?
It would surprise you as to how many people can get their interest rates adjusted to, not only a lower rate but to a fixed rate. In some cases, it could even be possible to get the loan reduced, of course those would be few and far between, but all is possible, and that is one of the things that this new plan is supposed to do. Remember, I did write about this possibly happening several months ago.
Some of the calls that I have received deal with those that have vacation homes with those terrible loans, and they wonder what can be done to save those properties. If the borrower has assets, and has been making their payments on time, chances are that the mortgage holder would not listen to any workout program, but may consider the property being sold as a “Short Sale”. Only a professional who deals with the lender may be able to help.
If you, the borrower, have missed payments and are currently running late, chances are that a good mitigation service company could be of help. A professional service company that deals in loan modifications or “Short Sale” negotiations is really the answer. Roughly seventy-percent of loans should be modified. According to the California Association of Realtors® only 1:24 percent of “Short Sales” will close, while some ninety-six percent of others will go into foreclose. Yet, this process could really be a benefit to the mortgage holder.
The “Short Sale” may seem as a solution for many, especially for the mortgage holder who would lose less money using this form of selling a property verse it becoming a bank owned property. When a lender is selling a bank owned property, there are numerous costs involved, including pricing the property to or below current market values, paying of commissions and closing costs. It may even require the mortgage holder to pay-off any past due property taxes, so a professional mitigation service company could be a savior for all.
Your local real estate agent may be able to give you the name of a lender who specializes in mitigation. What this company will do is to put together a complete package consisting of all debt that is owing including credit card and auto payments. He/she will then contact the mortgage holder; and first proceed to see how the loan can be saved. If, upon completion of the mitigation package, it may not be possible to save the loan, but it could be possible to obtain a price from the mortgage holder as to what would be an acceptable sales price.
At that point the property could be listed for sale with a local real estate agent. The Mitigation service company could be paid when the property is sold, and that could come from both the listing and selling agents commission, which would be negotiated. Or some form of payment could be made between the company performing the service and the persons selling the property. Everything can be negotiated.
I do have the name of a Mitigation Negotiator, but it is always best to use a service that is local, and better yet with one that works well with a real estate agent that you are also comfortable with.
What is most important for those having problems making their loan payments is to act quickly and not wait for that notice that the property is going into foreclosure.
I realize that there is an amount of anger when a homeowner is facing the possibility of losing their home, but don’t take that anger out on the property. I have seen people remove doorknobs, fixed appliances, light fixtures and in some cases they have even removed the disposal. While others take their anger out by punching holes in the wall, destroying fixtures and even pouring cement down the toilet. Those acts could cause you even more problems, and acting in such a manner may result in other litigation against you.
Louis Perlin CRS, GRI is a Syndicated Writer, Author, Professional Real Estate Witness and Mediator. Lou can be reached by calling (760) 327-8401 or via e-mail: email@example.com. Lou is available for real estate office meetings and book signing, with 50% of profits going to local charity.