Baltimore Short Sale

Distressed Homeowner’s may Be able to Stay in Home With BofA

Homeowners are getting offers through Bank of America to stay in their homes if they are facing a foreclosure. Those who have participated in Bank of America’s pilot program are expected to be affected less by about 1,000 homeowners and will transfer property titles to the bank and forgive outstanding mortgage debt.

However, the former homeowners will lease their home for up to three years at or below current market rental rate.  Homeowners who have loans which are owned by Bank of America and are behind on payments by more than 60 days and exhausted modification solutions are able to participate. The rental payment is figured to be less than the original mortgage payment, while also being relieved from other homeowner financial obligations which might include property taxes and hazard insurance.

“This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support,” said Ron Sturzenegger, a legacy asset servicing executive at BofA. “Mortgage to lease” is a program in which is being conducted on a solicitation basis; customers cannot apply or volunteer for any consideration.

An outreach has started in Nevada, Arizona and New York. If the program becomes promising, it could just lead to a wider program involving selected real estate investors who could potentially buy properties that meet their predetermined specifications and keep the previous homeowners as tenants.

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

If you are behind on your mortgage payments and would like to stop foreclosure on your Baltimore Maryland home, Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

JPMorgan Pays $45 Million in Military Lawsuit

A lawsuit that accused large banks of charging military veterans excessive fees in government backed loans has JPMorgan Chase paying the federal government $45 million to settle the lawsuit. The original case which was against Wells Fargo, Bank of America, CitiMortgage, Suntrust Mortgage, Washington Mutual bank, PNC Bank, Countrywide Home Loans, Mortgage investors Corp. and First Tennessee bank.

JPMorgan has stated that the settlement states the agreement isn’t an admission of wrongdoing on the banks part. The law firm of Butler, Wooten& Fryhofer represented the plaintiffs in the case and confirmed the settlement on Tuesday.

As of now, JPMorgan Chase is the only servicer to settle. The original lawsuit started back in 2006 and says banks violated the federal False Claims Act and provision of interest Rate Reduction Refinancing Loan Program by over charging veterans fees not allowed under the IRRRLP program.

This refinancing program is available to homeowners with Veterans Administrations loans and gives them permission to refinance at lower rates. The original complaint claims the banks had overcharged veterans on fees and did not make aware the details when applying to get insurance on loans from the government.

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

If you are behind on your mortgage payments and would like to stop foreclosure on your Baltimore Maryland home, Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

Treasury Updates new HAFA Short Sale Guidelines

The United States Treasury has updated the guidelines for the Home Affordable Foreclosure Alternatives (HAFA) program, which helps homeowners who do not qualify for a federal modification and instead offers incentives to servicers, borrowers and investors who opt for a short sale or deed in lieu in order to avoid a foreclosure.

The updated guidelines for the HAFA program enact a new salutation acknowledgment. A servicer must now acknowledge a request for a short sale or deed in lieu within ten business days by sending a written confirmation to the homeowner recognizing the request. The amount of time for an acknowledgment applies to whether the request in response to a notice sent by the servicer in regards to HAFA as an option or is recruited by the borrower.

However, the timeline for a decision has been prolonged to no more than forty-five days from the initiation of the borrowers request for the short sale or deed in lieu.  Within forty-five days the servicer must provide the homeowner with a written approval, denial or a possible alternative once a completed request form, and also a copy of the executed sales contract and supporting documentation regarding subordinate liens is received.

 If for some reason the servicer is unable to comply with responding to the borrower within forty-five days, the servicer must send a written status notice to the homeowner on or before the forty-fifth calendar day, along with written updates for every fifteen calendar days until the a decision is made. Along with the new HAFA guidelines, servicers now have the ability to approve a short sale to nonprofit organizations with a stated purpose that the property will be rented or resold to the homeowner (an option that was once prohibited by the programs “arms length” requirement)

The Treasury’s latest status reports says its foreclosure prevention programs, as of the end of February, 4,488 homeowners have completed a short sale or deed in lieu through the HAFA program while another 10,177 homeowners have open agreements in the works with their servicers at the moment.

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

If you are behind on your mortgage payments and would like to stop foreclosure on your Baltimore Maryland home, Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

Hope Now, to Help Military Members Facing Foreclosure

Hope Now, which is made up of Investors, mortgage servicers, investors, non profits, and mortgage insurers, just concluded a two day brainstorming session on how to offer more support to U.S. military members in the line of foreclosure.

The plan that was discussed by attendees honed in on avenues attorneys, non profits, servicers and military attorneys can take when aiding members of the military facing foreclosure and permanent changes in station.

Those who also attended the two day initiative were judges, attorneys, and state housing agencies who gathered to talk about best practices in the mediation of foreclosure. Also in the aid of helping military members is the Consumer Financial Protection Bureau, who will be launching initiatives as well.

The Department of Defense, the CFPB, the Federal Trade Commission, and New York Attorney General released a database in the beginning of this month that will store information on companies and individuals who try to scam members of the U.S. military.

The stored information in the database will inform enforcement authorities of those who have already defrauded military members to make sure repeat offenses come to a stop for good.

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

If you are behind on your mortgage payments and would like to stop foreclosure on your Baltimore Maryland home, Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

CitiMortgage Short Sale Process

CitiMortgage homeowners who are unable to keep their homes are given alternative solutions that can help them avoid foreclosure. The loan modification program includes various options for homeowners who are having difficulties in making home loan payments.

One or two factors of a mortgage loan are changed so borrowers are given the opportunity to pay their mortgage based on a new set of payment guidelines. Loan modification programs aim to help borrowers avoid late fees and penalties while settling their debts accordingly. In some cases, payment due date is rescheduled at a later date to provide leeway for homeowners who are able to make full payments at specific dates during the month.

Most borrowers will request that the due date be moved to days near their respective salary schedules. There are also instances where the total amount due is decreased at a lower rate. This enables borrowers to make timely payments. The only drawback to this loan modification option is that the loan will be extended for a few more months or even years.

When borrowers fail to comply with the new payment set up, a short sale is often the first alternative that crosses the mind of most CitiMortgage homeowners. Giving up a home need not be complicated and difficult. Handing your home back to CitiMortgage is now made less painful and more beneficial with the introduction of the Home Affordable Foreclosure Alternative Program.

HAFA or Home Affordable Foreclosure Alternative Program was recently launched by the federal government with the help of the US Treasury Department. HAFA enables borrowers to follow a standardized and more streamlined short sale process. Instead of late fees and charges, borrowers are given financial incentives for handing over their residential properties in good condition. This financial reward is mostly used by sellers for relocation purposes. Servicers and investors are also awarded with incentives to cover for administrative costs and short sale-related expenses.

What is a short sale?

Basically, a short sale usually happens when a CitiMortgage borrower gets a residential property up for sale for a total sale price that is less than the existing, unpaid balance on the mortgage. The market value of majority of homes depreciates over time, thus making it hard for borrowers to sell their property at a higher asking price. A reduced home value may be caused by various factors. The current physical condition and surroundings of a short sale property is scrutinized to come up with a reasonable asking price.

CitiMortgage loan holders aware of the benefits derived from short sale proceedings. The benefits of opting for a sale instead of letting a property go into foreclosure are:

-CitiMortgage will waive its right to collect deficiency judgment

Once a price has already been agreed upon between a seller and CitiMortgage, no further collection will be conducted after closing period. By agreeing to the terms and conditions under the HAFA short sale process, lending companies lose their power to collect deficiency judgments- that which is the difference between total loan amount and the established asking price.

-CitiMortgage borrowers are given sufficient amount of time to market their properties in public. A total of 120 days are offered to sellers for short sale to proceed. Unless there is a strong, valid reason of a borrower’s inability to make the payment on time, residential properties that are not sold within 120 days become deed-in-lieu foreclosure cases.

-Although a CitiMortgage borrower may experience a not-so-perfect credit rating, a short sale only stays on a homeowner’s credit reports for a few years. Since short sales are considered to be settled mortgage debt, borrowers can apply for another loan once the credit status goes back to normal. Those who have neglected their delinquent mortgage accounts in the past have deep regrets for letting their homes go down as foreclose properties instead. A foreclosure on your credit status will last for many years and may even disable your from applying for home loans in the future.

The goal of short sales is to free homeowners from financial responsibility at a faster rate. Losing a home may be traumatic for some, but with the right mindset it can still become a start of something good and new. A seller’s willingness to give up his or her home will directly reflect the added convenience and hassle that are taken off from a homeowner’s shoulder after a successful short sale process.

CitiMortgage has been reaching out to their customers who are obviously having a hard time in making early, full home loan payments. By doing so, they are able to lower down their losses as well.  Offering a short sale as an ideal solution in settling mortgage debts proves to be an effective way of helping CitiMortgage borrowers in avoiding more financial problems in the future.

Short Sale Guidelines for CitiMortgage Borrowers

For borrowers who are seriously considering a short sale, here are a couple of tips that can help make the selling process faster and more efficient:

-Report financial difficulties immediately to the loss mitigation department of CitiMortgage. They handle all issues related to payment delinquency. They will most likely advice you to go through a short sale if the cause of delinquency is projected to be long term in nature.

-Submit all requirements and documentations that are needed to be approved of short sale in a timely manner. Make sure to fax or send them all the needed forms prior to deadline to avoid processing delays.

-Present an accurate and well-organized hardship letter. In order for the loss mitigation department to approve your short sale request, you must submit a compelling hardship letter that provides all possible reasons of your inability to make timely payments in the future.

-Hiring a real estate agent who specializes in short sale proceedings will make the process much faster and less frustrating to borrowers.  Maryland Short sale specialists are known to establish the lines of communication between borrower and lender, thus making it relatively easy to get an approval from the bank and a buyer right away.

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

Are you a Maryland homeowner who wants to stop foreclosure on your Baltimore Maryland home,? Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

A reported income of $4.1 billion was reported in the fourth quarter for Wells Fargo, which was up 20% from the previous year. Wells Fargo earned $15.9 billion for the full year, which was up 28% from 2010. Wells Fargo’s mortgage department gained $2.4 billion in the fourth quarter which was a slight decrease from $2.7 billion a year earlier. Wells Fargo originated $357 billion in 2011 for new home loans, which was down $386 billion in the previous year.

For the mortgage listed as non accrual in foreclosure decreased to $4.08 billion at the end of the fourth quarter, a decrease from $5.2 billion a year earlier. Wells Fargo hit a loss of $ 272 million from repurchasing bad mortgages from investors, but it was almost half of the $572 million in losses for the three months concluded December 31, 2010. At the end of 2011, Wells Fargo held about $2 billion in provisions for credit losses, which was down from $3 billion at the end of the previous year.

Chief Risk Officer Mike Loughlin stated that number is decreasing at a slower pace going into 2012. “We have seen significant improvement in credit performance over the past eight quarters, and expect continued but slower improvement in 2012 as portfolio quality approaches a stable, more normal level,” Loughlin said. “Absent significant deterioration in the economy, we continue to expect future reserve releases in 2012.”

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

Trying to stop foreclosure on your Baltimore Maryland home,?  Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

Income Tax after a Baltimore Maryland Short Sale: 4 Questions to Tackle

There are many homeowners who have become bewildered by the fact that they need to pay income tax after a Baltimore short sale.  After all, who would have ever thought that paying an income tax would apply to selling a property at a loss rather than profit?  This is however not the view being taken by the Internal Revenue Service (IRS) when it comes to short sale transactions.  Since the short sale industry is relatively young, it is not surprising to note that many homeowners are not aware of this fact.

With the current state of the real estate market, it is expected that one of the most common concerns has something to do with the tax consequences of holding short sale transactions.  Most homeowners also realize that it is the banks that end up on top with the implementation of a short sale, which is why an income tax on the seller usually comes as a surprise. 

However, when you take into consideration that the cancelled debt is treated as an income by the IRS, then the income tax after a short sale suddenly makes sense.  Other commonly asked questions include:

1. What is the concept of cancellation of debt?

When money is borrowed from a commercial lender, and the lender in some future date decides to forgive or cancel the financial obligation, the total amount that has been forgiven may have to be included in your declared income for the purposes of taxation.  This is of course dependent on some circumstances that are subject to tax considerations.

It is necessary to understand that when you borrowed the money, there was no need to declare it as income because of the understanding that you are obliged to repay it to the lender.  Subsequently, when the obligation is forgiven, the amount that was part of the loan is now considered as an income because the obligation to repay no longer exists.  The lender is likewise required to report the amount that has been cancelled from the debt.

2. Will the cancellation of debt always result in a taxable income?

Homeowners should be aware that a cancellation of debt will not always result in an income tax after a Baltimore Maryland short sale.  There are actually a number of prevailing exceptions that can be considered where the cancellation of debt will not result in a taxable income like:

• Bankruptcy – when a debt is discharged because of bankruptcy, nothing is considered as taxable income.
• Insolvency – once the homeowner has been declared insolvent and the debt is subsequently cancelled, a portion or the entire cancelled debt may not be subjected to taxation.  A homeowner is declared as insolvent when the total amount of debts that they have far exceeds the fair market value of all the assets that they hold.  The process of insolvency is fairly complex to determine, which is why a tax professional may be needed to assist to verify the exception.
• Some farm debts – when the debt is associated with the operation of a farm, with more than half of the income you received for the past three years coming from farming, and the loan came from an individual lender or company that is regularly engaged in the practice of lending, then the cancelled debt normally does not fall under taxable income.  Since taxation rules for farmers are complex, it is important to get the services of a tax professional to receive the proper recommendation.
• Non-recourse loans – with this type of a loan, the lender has no other remedy in case of default but to repossess the property that is being used as collateral or has been financed.  This means the borrower cannot be personally pursued by the lender in case of default.

3. Are rental homes covered by the Mortgage Forgiveness Debt Relief Act of 2007?

The Act is designed to cover only principal homes, which means that any debt forgiven in relation to an income tax after a short sale derived from a vacation or rental home will not qualify for exclusion.  There are some homeowners who live in various homes throughout the year based mostly on the climate.  The home where majority of the time is spent is mostly considered as the principal home.

During the preparation of the taxable income, it is incumbent upon the homeowner to show proof that the property in question is indeed the principal residence.  It is essential for the homeowner to occupy the principal residence until the short sale has been completed.  Once the homeowner moves out before closing, then it is deemed as a foreclosure.

However, if an approved short sale request has been secured before the enforcement of a foreclosure, then the debt that has been forgiven as part of the short sale transaction does not qualify as an exclusion from the taxable income that is levied on the transaction.

4. How will a homeowner report exclusion from income tax after a Baltimore Maryland short sale?

Once the form for the cancellation of debt has been received from the lender, the homeowner must report an equivalent amount on the Reduction of Tax Attributes Due to Discharge of Indebtedness.  It must also take into consideration the basis for adjustment.  The homeowner is required to check the appropriate box that will result in the exclusion based on the itemized circumstances.

The qualified principal residence indebtedness should be checked for short sale transactions.  Homeowners should be aware that the exact amount of forgiven debt is reflected on the form for the cancellation of debt.  Other information that are shown in the form include the name of the creditor, identification number, name of debtor, amount of debt cancelled interest, fair market value of the property, and the date of cancellation of debt.

All of these are legitimate questions that need to be addressed accordingly.  Moreover, there are additional circumstances where a homeowner can claim exclusion, but would require the services of a tax professional for proper resolution.  These questions however will give you a clearer view on the issue of income tax after a short sale. Contact an experienced Baltimore Maryland short sale specialist to acquire more information about income tax after a short sale!

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

If you are behind on your mortgage payments and would like to stop foreclosure on your Baltimore Maryland home, Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

 Fourth Quarter Analysis shows amount of unpaid Mortgages

Lender Processing Services has released new data that shows at the end of January, there were an estimated 6,082,000 mortgages in the United States that were unpaid. The analysis also includes loans that are more than 30 days delinquent as well as loans that are in foreclosure. The Lender Processing Services statistics came about their information from its loan level database of nearly 40 million mortgage loans. As of January, the national mortgage delinquency rate was at 7.97%.

The delinquency rate is determined as a measurement of all loans that are behind by at least one payment, but does not include those that are already in the process of a foreclosure. The delinquency rate saw a decline, for both the month and year, with having January’s rate down 2.2% from December of the previous year.

The total foreclosure inventory rate saw 4.15% last month which is up 1.2% when compared to December of 2011, but a small decrease of 0.1% when compared to year over year numbers. The number of mortgages that are 30 or more days late but has yet to reach foreclosure was at 3,998,000.

As for 90 days delinquent or longer, 1,772,000. Florida is said to have the highest number of non current mortgages last month which was followed by Nevada, Mississippi, New Jersey and Illinois. Montana, Wyoming, Alaska, South Dakota and North Dakota are states with the lowest amount of noncurrent loans in January.

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

Are you a Maryland homeowner who wants to stop foreclosure on your Baltimore Maryland home,? Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

6 Questions to Benefit from the Chase Short Sale Program

The Chase short sales program is a transaction which involves the sale of a specific property using a line of credit or loan secured from the bank.  The proceeds of the short sale transaction are intended to be used to cover a portion of the outstanding balance on a loan, which means that the status of the deficiency should be clearly discussed with the bank prior to the transaction.

The importance of the Chase short sales program is highlighted by the fact that it provides one of the highest incentives to distressed homeowners.  It is necessary to understand that this option is open to homeowners who no longer have the financial capacity to cope with the mortgage payments on their property and have the desire to sell. 

Usually, it is expected that a Chase Loss Mitigation specialist will work with the homeowner and the designated real estate agent for the duration of the process to make sure that the transaction is approved in a timely manner.  Potential questions that may arise about the short sale include:

            •How can the short sale begin if the property is not listed?

Initially, if the homeowner has a genuine desire to sell the property, it is extremely important that it is listed.  This emphasizes the need for an experienced short sale agent to ensure that the property becomes listed.  Normally, the real estate agent has the necessary expertise to ensure that the property is included in the MLS (Multiple Listing Service) of your locality.

This is why it is extremely important that a decision be initially made whether the short sale process should be pursued.  Secondly, once the decision has been made, it is essential that a real estate agent with a solid track record on closing short sales should be available to you.

            •What should be done if a listed property is not selling?

It is important to understand that the extremely huge incentives provided by the Chase short sales can only be made available when a short sale transaction is closed.  This would be impossible if there are no offers being received on the listed property.  The first thing to do is to discuss the pricing with the Baltimore Maryland short sale specialist who should have adequate experience to ensure that the situation can be dealt with correctly.

With such a volatile economy, it is extremely important to have a competitively priced property listed in the market.  Keep in mind that the pricing of the property is dependent on the prevailing market value in the area where the property is located.  The homeowner together with the real estate agent should also consult with a Chase Loss Mitigation specialist so that the options can be reviewed.

            •When an offer is received, what should be done?

Once an offer is received on a listed property, the services of a real estate agent are needed to prepare a Short Sale package to be submitted to the bank.  It is important that all the documentary requirements should be submitted in order for the short sale transaction offer to be approved.

            •What is the documentary requirements needed in the short sale package?

For the Chase short sales program, the bank implements its own Information Packet that contains all the information that they need in order to correctly evaluate the short sale request.  The short sale package can be downloaded from the website of the bank, which contains a checklist of all the supporting documents that the homeowner needs to provide.

In general, the documentary requirements focus on financial information of the homeowner including the hardship affidavit detailing their current situation.  If the required information has been previously submitted because of a loan modification request, the Supplemental Packet would suffice.  Essentially, the bank would want to get more details about the proposed sale of the property.

            •How long will the processing of the request take?

It is important to understand that in considering the processing time, you must likewise ensure that all the documentary requirements have been submitted, otherwise, this can cause undue delays on your short sale request.  The Chase short sales program can typically come out with a decision within 30 days at a minimum.

It is equally vital to note that there may be some factors that can contribute to the delay of the decision like extremely low offers on the listed property.  The bank needs to consider the prevailing fair market value and use it as a reference if the offer is justified.  Another contributory factor would be junior liens that are being held by other banks or in some cases individuals.  These other holders must also agree to the short sale request.  These are some factors that you need to be aware of in considering the processing time.

            •What is the incentive provided by Chase?

During the past few years, banks have begun to realize that by paying distressed homeowners, they become more willing to move out of a home that they can no longer afford.  With the Chase short sales program, it sends out solicitation letters to homeowners promising them remunerations of anywhere from $10,000 to $20,000, which is combined with the $3,000 incentive given out by the HAFA short sale program.

However, in reality, there are some homeowners who have received short sale incentives ranging from $30,000 to $35,000 out of the short sale program of Chase.  This is extremely huge when compared with other programs that payout about $12,000 to $20,000 on the average.  The Chase program even provides payment of 6% commission to the real estate agent.  In the short sale industry, this represents large incentives that are hard to pass up.

In order to avail of the incentive from the short sale program of Chase, you need to be able to submit within 48 hours the preliminary HUD documents for final approval.  At closing, the homeowner must also be able to send a copy of the Certified HUD-1 Settlement Statement, Affidavit of Arm’s Length Transaction, and copy of the wire transfer confirmation or certified funds check (escrow check), which are all signed and executed.

This short sales program is an excellent way for homeowners to deal with their current financial situation, considering its extremely huge incentive payments.  It is important though to take these questions into consideration to truly benefit from the Chase short sales program. When it comes to your future, educating yourself on how to get yourself prepared for a promising future is important. Contact a short sale specialist Realtor today and see if you qualify for a short sale!

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

Are you behind on mortgage payments and need to  stop foreclosure on your Baltimore Maryland home,? Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012

Recovering From a Baltimore Short Sale 

A short sale can be a tough ordeal for all parties involved, but it can still be possible to recover from one. As a method of debt repayment designed to be a foreclosure alternative, a homeowner can be saved the trouble of putting off mortgage payments and ending up in default. It might even be easier to relocate somewhere comfortable, and even buy another home soon enough. You might even be able to pay off all your loans in the process.

There are still a few kinks to work out after a short sale, though; things like your credit ratings, loan differences, and even deficiency judgments can hamper your ability to fully recover. Not everything is black and white, especially in the world of loan and mortgage payments. It is important for you to be familiar with the many risks and possibilities of a short sale, even after you close out and try to move on.

Watch Out: Potential Pitfalls

So you managed to sell your house after a successful short sale deal. You may think it’s time to start resting on your laurels, but don’t let your guard down just yet; there might be a few more humps to conquer on your road to a debt-free life. You might need to take a few steps back and check to see if you missed a few stops along the way:

●Watch your credit score – Despite many creditors and mortgage associations advertising how a short sale will have a smaller impact on credit than other alternatives, the reality of the situation is much different. While there are cases of short sales not having large impacts on a credit score, all of them will appear significant on your final credit report.

This is because a short sale is much like a foreclosure or deed-in-lieu at the end of the day; your payments will still be considered delinquent.

●Timing and Pace – A typical foreclosure will take months to end, whether a homeowner chooses to stop making payments entirely, or if a short sale is running on the same clock. In states where a deficiency judgment is considered illegal, homeowners are given a special redemption period that can go on for as long as 12 months. This period allows people on foreclosures to recuperate their finances and move on after a foreclosure.

●Many commercial short sales may have something like this; many reports indicate that homeowners become eligible for new mortgage loans much sooner than people who let their homes foreclose.

●Beware of the repo men – Other states where deficiency judgments are legal allow your lenders or banks to come after you for any remaining differences in your existing loans. Not all short sales immediately mean debt forgiveness for a homeowner.

●In most short sales, some banks will require homeowners to sign a promissory note. This note essentially means that the homeowner will agree to pay back the difference between the total amount owed to the bank, and the final sale price of the home in question.

These problems can seem like a lot to swallow, especially after an ordeal as difficult as a short sale. Once you determine these problems, however, a solution may come naturally.

Dealing with the Aftermath

While problems both old and new may arise after you have gone through a short sale, remember that there is always light at the end of the tunnel.

●A credit score is possible to recover, even after something as damaging as a short sale or foreclosure. The total impact a short sale will have on your credit score will depend greatly on how good or bat it was before the short sale happened. Your score may dip by hundreds of points at a time after a short sale or foreclosure.

●If your credit score was already low to begin with, then the total drop might be less severe, depending on the creditor handling the short sale. If you had a high credit score before a short sale, then a bigger chunk of the score may come off.

●Be sure you handle your credit in a much safer and modest manner after a short sale, so that your credit score rises slowly, yet steadily.

●If you are in a state where a deficiency judgment is legal, and lenders end up chasing you for remaining loan differences, seek assistance from non-profit organizations that represent homeowners against the real estate crisis. Handling a deficiency judgment yourself can end up extremely difficult, and may put a vice on your time and money.

●A good attorney can help you wiggle your way out of any inconvenient or draining written clauses that get hairy. The attorney may even prevent a lender from pursuing any further payments entirely. An attorney will cost you money, so make sure you have your finances in order after a short sale before considering this option.

A short sale can seem like a smart move at first, but the consequences may end up coming after the fact. Since we face an unsure real estate outlook, it’s always important to hope for the best and expect the worst, even when a short sale is on the brink of closing. Recovering from a short sale will then become the other half of your battle to a normal financial state. To learn more about short sales and how to recover from them, contact a Baltimore Maryland short sale specialist today!

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

Are you a Maryland homeowner who wants to stop foreclosure on your Baltimore Maryland home,? Our Maryland short sale Realtors offer no cost assistance for you in your short sale! Our Baltimore MD area Distressed Property Expert real estate agents are here to help, and are Certified or trained in the Maryland Home Affordable Foreclosure Alternatives, or HAFA Government short sale program. Our services are 100% FREE to you!

Copyright First Coast Realty Associates 2012