Are You Considering a Short Sale?
It's important to have a plan for your present and future financial well being, owning a home can be a big part of the that equation. Unfortunately, life does not always go as planned, circumstances can change and sometimes difficult times require difficult decisions. If you've found yourself in the position of considering a short sale, know that you are not alone and you are not being judged based on the ups and downs of your financial health. Experienced and compassionate help is available if you feel this may be the appropriate solution for your situation.
What is a Short Sale?
A short sale is when your mortgage holder agrees to accept less than the balance owed as a payoff of your loan. A short sale approval comes with the burden of proof of financial hardship, thus a bank agreeing to a request for a short sale is not always guaranteed.
Short Sale vs. Foreclosure:
In very general terms, a short sale will typically have less impact on your credit and be quicker to recover from than a foreclosure. Since we are not able to give tax, legal or financial advice, it is highly recommended that you speak to the appropriate professional to determine what the possible effect on your credit and financial future may be in the event of a short sale or foreclosure.
Deed-In-Lieu of Foreclosure:
A deed-in-lieu of foreclosure is an arrangement where you voluntarily turn over ownership of your home to the lender to avoid the foreclosure process.
Preparing for a Short Sale:
Some items to begin assembling if you feel a short sale may be the right decision for you:
Hardship Letter explaining your previous financial situation and what has changed that has caused your present hardship and inability to continue making your mortgage payments.
Last 2 months of bank statement - all pages are required (including intentionally blank pages)
Last 2 months of paycheck stubs
Last 2 years of tax returns, including all schedules and W-2's
This is just the very basics, different banks may have different and/or additional document requirements. We can address that once we establish communication with your lender and obtain their instructions.
How to Get Started:
It's starts with a conversation. Simply call, text or email me and we can set up a time to chat to discuss your situation and determine if a short sale might be an option for you. Our conversation is kept strictly confidential and your information is never shared without your permission.
How Much Will it Cost?
Getting help comes at no cost to you. If you're short sale is approved, the lender will typically cover all the costs associated with the sale.
Mortgage Debt Cancellation:
A law enacted in 2007 provided temporary relief to troubled borrowers when some portion of mortgage debt is forgiven and the mortgage covers the borrower's principal residence. That relief has expired and been extended several times. The latest extension, enacted in December 2020 via the Consolidated Appropriations Act, provides relief for debt forgiven from January 1, 2021 through December 31, 2025, with a maximum of $750,000.
CA Homeowner Bill of Rights - CA Dept of Justice
Avoiding Foreclosure - HUD.gov
Foreclosure Process & FAQ - Courts.ca.gov
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