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Home Destination
If you or someone you know is facing foreclosure and is seeking to engage an experienced CDPE, feel free to contact me immediately, and I will respond to your request on a priority basis. Taking action as soon as you can ensures that you have the most and best options available.
×For home owners who can no longer afford to keep their mortgage payments current, they may be considering a "short sale."
How To Buy A Short Sale in the Minneapolis real estate mortgage crisis.
Short sales are a mixed and complicated deal for the buyer, the seller and the lender. If you're the short sale seller, a short sale is likely to damage your credit -- but not as much as a foreclosure will. You'll also end up after your home closing with "zero" dollars from the deal, making it difficult for you to have the finances for another down payment. It is important to NOT walk away if your facing foreclosure, know the types of foreclosures, and see if you pre-qualify for a loan, check out a loan modification or get help through the national mortgage settlement.
Enlist legal advice from a competent real estate lawyer
Enlist an accountant to discuss short sale tax ramifications
Prepare a Hardship Letter
Your lender will need to understand how you fell into this position. Layoffs, medical problems, death of family provider, etc. are all viable reasons. Lenders do not look favorably on someone who can to this state because of dishonesty or criminal activity.
Understand that the I.R.S. could consider debt forgiveness as income
Determine whether your loan qualifies for a deficiency judgment or claim.
Preliminary Net Sheet
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fee. If you have them, be sure to include real estate commissions. If you need help calculating these fees, Home Destination or your lawyer can assist. If in the end the bottom line shows cash to the seller, likely you do not need a short sale.
Call the Lender
It can be time consuming to find the person responsible for handling short sales. It will not suffice to talk to the "real estate short sale" or "work out" department; you should ask for the supervisor's name, the name of the individual capable of making a clear decision.
Submit Letter of Authorization
By starting upfront with written authorization to do so, lenders typically then are willing to disclose the needed personal information. Engage Jenna Thuening as your real estate agent. Having a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with individual parties, that are needed in the process, about your loan.
Proof of Income and Assets
Always be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash, other real estate, or anything of real value. Do not expect your lender to be in the charity business.
Bank Statements
Listing Agreement and Purchase Agreement
Once you reach an agreement to sell with a prospective buyer, the lender will want a copy of the offer, along with a copy of your listing agreement. You can expect that the lender may want to renegotiate commissions and is likely to refuse payment for certain items such as home protection plans or termite inspections.
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Two killers to know about as you learn how to buy a short sale:
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You cannot do a short sale purchase if there is no default on the mortgage loan -- Lenders almost never will accept short sale offers or requests for short sales until the borrower is far behind in payments and a notice of default has been issued.
Homeowner Bankruptcy -- If the home seller has filed for bankruptcy, look for something else. Lenders are unlikely to consider a short sale when the seller has filed for bankruptcy because negotiating a