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Daniel Lario…, Other/Just Looking in Los Angeles County, CA

What are the owner's options if their pre-foreclosure home doesn't short sell?

Asked by Daniel Larioza, Los Angeles County, CA Fri Mar 26, 2010

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Well what you should be asking is how can I avoid foreclosure because short sale is a form of foreclosure and foreclosure is a life changing event.
Banks tell you to try short sale to see if they can cut their losses but do not want to take much less than you owe.
Some Realtors push short sale because there is no other business out there, they need to eat and pay their mortgages just like you and I.
You need to start trying to avoid foreclosure and that is done by being proactive, contacting the bank and telling them you need options becuase you do not want to lose your home. As you are doing this you need to record and document everything they say or do and submit everything they ask for yesterday because you need to look like you were trying while the bank was not, making the bank look like the bad guy. Making the bank look uncooperative can be used to fight foreclosure in the courts, judges do not like uncooperative banks especially now. GET ON THE PHONE NOW AND AVOID FORECLOSURE- all forms of foreclosure (short sale is a form of foreclosure) are life changing events ask any one of my clients

Ramifications of Foreclosure, Short Sale or Deed-in-lieu-of-foreclosure

Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like your job, yes employers are checking credit records these days.

Your credit score will be reduced by 200-400 points, short sale a little less 100-200 points.

All forms of foreclosure stay on your credit report for 10 years.

After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure
* Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
* Buying After a Foreclosure with Extenuating Circumstances
The waiting period is 3 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure with Extenuating Circumstances
The waiting period is 2 years up to 7 years.
* Buying After a Short Sale
The waiting period was just upped from 2 to 3 years. However, if a seller does not have a 60-day late pay, that seller may immediately buy another home. It's a reason to stay current on your payments while the home is on the market as a short sale.
In addition to the waiting period, most loans require a minimum down payment of 10% and a minimum FICO score of 680. The home purchase must also be the principal place of residence, not a rental nor a vacation home.

Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.
0 votes Thank Flag Link Sat Mar 27, 2010
In order to answer this question correctly you'd have to really analyze what the specific time frames are. When was the NOTICE of DEFAULT FILED? WHEN/IS a TRUSTEES SALE SCHEDULED? WAS THE LENDER AWARE of the SHORT SALE? Was a complete short sale package submitted? Was a loan mod attempted? Remember that as per HAMP lenders MUST NOW DOCUMENT their EFFORTS at home retention MORE THAN EVER. A Deed in Lieu is a great option---IF THE BORROWERS CREDIT isn't DINGED and there aren't any liens/encumbrances against the property.

It's really challenging to offer GOOD ADVICE without knowing the dates of the NOD and the future Trustees sale.

Give me some time frames and /or dates and I might be able to give you some better advise.
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0 votes Thank Flag Link Fri Mar 26, 2010
Dear Daniel,
Kieth's answer is spot on.
The other answers are not quite correct. Not all lenders will cooperate with a short sale, nor do they have to. There are too many factors as to why this is true for me to list here, but suffice it to say that there are many obstacles to short sale, beyond just pricing, as stated in the other answers.
If you want to read more about this, I have prepared a FREE 32 page booklet on "How to Avoid Foreclosures" which details all of the process for you. I will send it to you with absolutely no obligation, just to do my part in helping with home retention. Just contact me below.
Best of luck,
Deborah Bremner, SFR, CRS, CSP
REALTOR, 00588885
Certified Short Sale Professional
Certified Home Retention Specialist
(D) 818.564.6591
TheBremnerGroup@gmail.com
Blogging at: http://TheBremnerGroup.com/blog
0 votes Thank Flag Link Fri Mar 26, 2010
Hi Daniel, all lending institutions will cooperate with short sale! However, there are other options available for the borrower (homeowner) as well. i.e. Forbearance, Loan Mod, Deed in Lieu... Never let the property be foreclosed!
I am an industry recognized Certified Distressed Property Expert (CDPE) designated Broker. Go to cdpe.com and you may find some of the answers you are looking for.
If you wish to connect with me, please reply to vanvartan@gmail.com
0 votes Thank Flag Link Fri Mar 26, 2010
If you price it right, it should. There is always a buyer, it's just getting the right price. I have experienced certain areas that are very depress and properties move real slow. In those areas, I suggest you look at the income value approach method instead of area comparables. This approach is geared towards investors. Their whole perspective is cash flow, yield, monthly income. However, if time is a problem and you have a possible foreclosure sale, I recommend that you work on a loan mod and a possible forbearance agreement at the same time with principle reduction to the note. Your only other option would be bankruptcy. Chapter 7, liquidation or chapter 13, reorganization of debt.

Robert E. Silva
robert@reodepot.net
http://www.reodepot.net
(323) 251-1975
0 votes Thank Flag Link Fri Mar 26, 2010
If your home doesn't short sell, you have 2 option if you aren't going to make the payments, or : 1. Try the short sale again. I've never had a bank flat reject a short sale, so there must be something wrong with the offer presentation, or the offer price was too low. 2. The house gets foreclosed on.

Let me know if you have any question.

Richard Schulman
#1 Listing and Selling Agent
Keller Williams Westside Realty
310-482-0173
schulmanrd@yahoo.com
0 votes Thank Flag Link Fri Mar 26, 2010
The owner either has to complete a modification, payoff the loan, reinstate the loan, transfer the deed to the lender through a deed in lieu of foreclosure or sell the property (either short sale or normal sale). Otherwise the lender will foreclose.


Keith Manson
First Weber Group
Certified distressed Property Expert
metro milwaukee

http://www.milwaukee
0 votes Thank Flag Link Fri Mar 26, 2010
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