Could you be saved by a Short Sale?

A Short Sale occurs when a homeowner owes more on their property than the property is actually worth, but their bank agrees to accept less than what is owed as "payment in full", in an effort to avoid the foreclosure process.  In other words, if the Seller meets the lender's criteria, the lender agrees to "write-off" the portion of a mortgage that is higher than the value of the home.

 What qualifies a homeowner for a Short Sale? 

• Behind on payments
• Legitimate hardship
• Little to no equity 

Most lenders will not consider a short sale unless the homeowner is at least 30 days past due on payments, although it may be possible for a lenders to work with homeowners who are not currently behind but are struggling to make their payments on time.

Examples of a legitimate hardship are:
Loss of income
Death
Divorce
Adjustable Rate Mortgage resetting
Property Taxes Adjusting (normally new construction)
and a variety of other hardships

Why would a lender accept a short sale rather than allow the property to go to foreclosure?

The foreclosure process is too costly and time intensive.  Banks would rather cut their losses to move on to replace these "bad loans" with "good loans".  The banks are also penalized by the feds by having REO (Real Estate Owned) properties on their books.  They are required to have 3-6 times the amount of their properties held in reserves and they can not loan out that money.

If you think you might qualify for a short sale please contact me ASAP.  Texas has an extremely aggressive foreclosure process and homeowners in this situation need as much time as possible to successfully process and close their short sale.