Avoiding Foreclosure
Are you falling behind on your mortgage payments? Worried about the possibility of losing your home to foreclosure by the mortgage lender? You are not alone. In the United States, nearly 10% of mortgages are in default with payment over 30-days past due. Whatever the reason for your struggle, foreclosure may not be your only option.
A Short Sale may be the solution. What is a short sale? In simplest terms it means selling a home for less than the amount that is owed to the mortgage lender. If the lender agrees to a short sale, the rest of the homeowner’s debt may be forgiven. Lenders sometimes agree to a short sale and take a small loss to avoid a lengthy and costly foreclosure process. While there are consequences to a short sale, the resulting impact of a foreclosure is worse.
Comparative Advantages of a Short Sales vs. Foreclosure
| Short Sale | Foreclosure |
| Eligible for Fannie Mae Loan after 2 years. | Ineligible for 5 years |
| Credit Score will be lowered as little as 50 points for 12-18 months. | Lowered 250 - 300 points for 3 years |
| Not reported on credit history | Public record for 10 years or more. |
| Bank may give up right to pursue deficiency judgement. | Bank can pursue a deficiency judgement 100% of the time. |
| Not a challenge to employment | In most cases will challenge future employment. |
| Not a challenge for security clearance | Makes it impossible to get a security clearance for employment. |
Sara Jan Malakaim is a Certified Distressed Property Expert (CDPE). She has been trained to help homeowners who are facing financial distress and struggling to make their mortgage payment. She may be able to help you keep your home or sell it in a short sale.
Our goal is to help you avoid a credit-destroying and traumatizing foreclosure by negotiating with your lender. Even though 85% of homeowners who are experiencing financial distress turn to a licensed agent, less than one percent of agents are adequately trained to market and sell distressed properties. Agents with the CDPE designation, such as Sara Jan, have the tools needed to find the best solution for your situation. Enduring financial troubles is difficult for any family; finding a qualified real estate professional should not be.
Sara Jan and the team at Ann Hoke & Associates are here to provide a professional solution. Simply e-mail or call and let us help you find a solution to your mortgage difficulties.
ann@annhoke.com
(615) 397-4024 (cell)
Frequently Asked Questions
Why would a lender agree to lose money?
While it may be surprising that lenders would agree to accept less money than what is owed, they benefit in many ways, too. The lender does not have to go through the costly legal process of foreclosing and then incur the added cost of selling the home or taking an even bigger loss.
How does a short sale help me?
It may help protect other areas of your life that are affected by a low credit score such as interest rates and employment opportunities. A foreclosure can drop your credit score 200 – 400 points and stay on your record for ten years. A short sale may not be reported to the credit bureaus or may be reported as “pay as agreed” or “settled for less than agreed.” Typically, a credit score drop after a short sale is due to late payments on your mortgage before the sale.
I’ve already received my foreclosure notice; is it too late for a short sale?
No, although there are many variables that can affect a foreclosure timeline. We can help you extend the foreclosure timeline up to six months or maybe even seven or eight months. Whatever the situation, a short sale can be done and approved up to the day of bank sale or auction.
I haven’t missed any mortgage payments; can I still do a short sale?
Typically a lender will not consider a short sale unless a homeowner is in financial distress. However they sometimes agree to a short sale if you can demonstrate that you are under financial hardship (making the payments by paying with credit cards, borrowing from family members or retirement accounts) and will not be able to make them in the future.
Who pays the real estate agent’s commissions, taxes and other expenses that go with a home sale?
The lender pays the commissions and closing costs associated with the sale of home, not the seller in a short sale. However, if the bank pursues a deficiency judgment, that amount would be added to the shortfall that the bank may try to recover.
For a confidential appointment, please contact Ann Hoke and we will get you started down the path to recovery.
ann@annhoke.com
(615) 397-4024 cell
