If you have received a Notice of Default on your property, you may
want to consider selling it as a Short Sale before it is scheduled to
be sold at a Trustee Sale and become a Foreclosure property. I am
certified by the National Association of Realtors as a Short Sale and
Foreclosure Resource, and I will work with you to help you sell your
home as a Short Sale with a minimum amount of stress and hassle.
*I have extra training and certification to help with short sales and foreclosures*
There are many questions regarding foreclosures and short sales and how it affects the homeowner. The most common questions are:
- What are the differences between a foreclosure and a short sale?
- Should I try to do a short sale or let it go into foreclosure?
- How will a foreclosure affect me in the future?
- How does a short sale affect me in the future?
- How does a short sale or a foreclosure affect my credit score?
The truth is, these may seem similar, but the outcomes are very different from each other and they will affect your future very differently. As a homeowner, it is imperative to understand the key differences
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Issue
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Short Sale
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Foreclosure
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Credit Score
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Only late payments on a mortgage will appear on you credit score. after the short sale, your mortgage will appear as paid or negotiated. This willlower your score by a minimum of 50 points if all other payments have been made. A short sale can affect your credit score for 12-18 months.
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Your credit score will be lowered between 250 - 300+ points. This typically affects your score for 3 years.
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Credit History
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Short sales are not reported on a person’s credit history. There is no reporting item for "short sale" and it typically reported as "paid in full" or "settled"
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Foreclosures will remain on public records for 10 years or more.
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Present Employment
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A short sale is not a challenge to employment because it does not appear on credit reports.
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Employers have the right and regularly check the credit of employees with sensitive positions. A foreclosure can result in immediate reassignment or termination.
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Future Employment
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A short sale is not a challenge to employment because itdoes not appear on credit reports.
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Many employers require credit checks on prospective employees. Foreclosures are detrimental to a credit report and in many cases will challenge employment.
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Security Clearances
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A short sale will not have any affect on most security clearances.
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Foreclosure is the most challenging issue against a security clearance besides a conviction of a felony and serious misdemeanor. A police officer, person in the armed forces, CIA, Security and other positions which require security clearance, in almost all cases, clearance will be revoked and your position will be terminated.
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Deficiency Judgment
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In some successful short sales, it is possible to convince the lender to give up the right to pursue a deficiency judgment against a homeowner.
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With 100% of foreclosures (expect in the states with no deficiency) the bank has the right to pursue deficiency judgment.
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Deficiency Judgment - Amount
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In a successfully managed short sale, the home is sold at a close to market value. Resulting in a lower deficiency judgment.
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In a foreclosure, the home will have to go through an REO process if it doesn't sell at auction. This will often result in a lower sale price and longer time on the market. Possibly leading to a higher deficiency judgment.
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Future Loan With Mortgage Company
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There is no declaration or question regarding short sales.
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The 1003 application, for prospective home buyers, has a question regarding foreclosures in the past 7 years. You WILL have to answer yes to this questions. It will affect your borrowing rates.
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Future Fannie Mae Loan – Primary Residence
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A homeowner who closes a short sale is eligible for a Fannie Mae baked mortgagein 2 years.
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A homeowner with a foreclosure becomes ineligible for a Fannie Mae backed mortgage for 5 years.
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Future Fannie Mae Loan – Non-Primary
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An investor who closes a short sale is eligible for a Fannie Mae backed mortgage in 2 years.
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An investor with a property in foreclosure is ineligible for a Fannie Mae backed mortgage for 7 year.
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Here's how I can help you in a Short Sale process:
- After you have received a Notice of Default, work with you to
explore all of your options. These may include a loan modification,
short sale, deed in lieu, or foreclosure.
- If you decide to list your property as a Short Sale, help you
with all of the information and documentation you need to provide to
your lender.
- Assemble a complete Short Sale package with all of the documentation your bank needs in the order they need it.
- Price your home to attract the most offers very quickly.
- Review all offers with you and select the one the lender is most likely to review and close.
- Provide an experienced Short Sale processor to negotiate with your lender.
- Keep in touch with you weekly as your Short Sale progresses.
- Keep in touch with your buyer to be sure they are informed and motivated to stay with the Short Sale.
- Answer any questions you have along the way.
With the help of my assistant, I have been receiving lender approval
in 30-60 days.
If you are a homeowner in Cardiff, Encinitas, or
Carlsbad, please contact me. I can help make a the Short Sale process
as smooth and painless as possible.