MORTGAGE SHORT SALE, A Five Step Process
July 27th, 2010
Are you falling behind on your mortgage and want to avoid foreclosure through a mortgage short sale? The the five steps below to execute a mortgage short sale.
The foundation of a mortgage short sale in Phoenix, Arizona is as follows...a mortgage short sale is when you find a buyer for your home and the lender agrees to take the offer even though it will not pay off the mortgage entirely. In the mortgage short sale process, the lender forgives the remainder of the mortgage balance.
Step 1:Begin the mortgage short sale in one of two ways.
(1) Find a buyer in Phoenix, AZ for the mortgage short sale of your home and then contact the lender to see if a mortgage short sale is acceptable. Or, (2) contact the lender and ask for their approval in using a mortgage short sale to sell the home.
It will work out better if you already have a buyer ready to purchase your home, possibly an investor or a friend or family member. However, if you don't have a buyer already, you should probably talk to the lender about a mortgage short sale. Lenders do not have to agree to a mortgage short sale. So, you should check on the lenders terms and conditions to see if you can use a mortgage short sale to get rid of your property. Check on this so that you don't waste time and energy trying to find a buyer.
Step 2:If your lender is ok with a mortgage short sale, get all of the information that the lender will need to verify the mortgage short sale of your home. Most lenders will request a hardship letter stating why you need to mortgage short sale your home, a copy of the buyers offer, a proposed settlement statement, and the lender might want to speak with the potential buyer. Generally, the lender collects this information to make sure that you are not going to profit from the sale. Since the lender will lose money, they want to make sure that you are not making any money.
Step 3:Give your lender all of the documentation and information that they need to approve the mortgage short sale of the home.
Step 4:Protect your own interests in this process. If the lender agrees to a mortgage short sale, make sure that you have a real estate agent or lawyer to help you understand the terms of the mortgage short sale. Most important is the idea that your lender will accept the offer as payment in full. It is within the lender's rights to ask for you to pay the difference between the offer price and the payoff amount.
Step 5:If you lender approves of the mortgage short sale, have a real estate agent contact a title company to handle the transaction. When you have reached this point in a mortgage short sale, it is much the same as a regular home sale.
For more videos on short sales check out Kevin and Fred on the Short Sale Power Hour. Video for Short Sale Specialists.
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Fred Weaver is a founding co-owner of Group 46:10. He has been working in the financing/real estate business for over 7 years. Fred began his real estate career by working for a large wholesale bank as a processor and rate/lock specialist for home mortgages. After 2 years in the business, Fred transferred from the banking side of home loans to the mortgage side. While on the mortgage side of financing, Fred gained experience originating mortgages and processing files for Morgan Capital of Arizona, Inc.
Kevin is a founding co-owner of Group 46:10. He began working in the real estate business in 2007 after spending 8 years working in the finance industry for companies such as Bank One, Green Tree Financial, & GE Capital.