Foreclosure in Raleigh>Question Details

Seeknchange, Home Owner in Raleigh, NC

i thought i had a fha loan in 2007 but i found out in 2008 when countrywide loans where transferred to bach that i had a conv. i do not have the note.

Asked by Seeknchange, Raleigh, NC Thu Jan 20, 2011

i got a letter 2 days ago that stated, i can short sale my home and to respond in 5 days.

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Who sent you the letter saying that you can short sale your home? Mortgage lenders do not solicit short sales - they are losing money on a short sale and they don't want to do it. You have to work hard, with an experienced professional REALTOR, to get them to accept your short sale offer. It sounds to me like the letter you received is from one of the many vultures flying around these days taking advantage of homeowners in difficulty. An "expert" telling you that you can do a short sale without direct knowledge of your specific circumstances is just looking for a commission.

There are many alternatives to short sales, and you should investigate them before jumping into a long and difficult process that is so detrimental to your financial life in the future. Talk to a REALTOR who knows how to do short sales (it's not for the faint of heart or inexperienced), but be sure that the REALTOR can also advise you about other options. There is a place for short sales, but most folks are better off with other options.
0 votes Thank Flag Link Thu Jan 20, 2011
Please be advised short sale is not your first nor best option. You should be attempting a loan modification or deferment first.
If and when a modification or deferment will not work then you have 2 options: short sale or deed-in-lieu-of, both have the same ramifications and I will list them below. Short sale basically is an avenue to SELL your home for less than you owe, part of the deal is going to be a negotiation between you and the bank as to what will be done with the short fall, this negotiation should be between you and the bank but when short selling you are bringing municipal parties into the negotiation do not let those parties take control and leave you owing monies at the end of the deal. Deed-In-Lieu-Of means you hand the deed of your home back to the bank without the need to SELL your home and the negotiations are between you and the bank not other parties that are looking to get the best deal they can on their end.

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; insurance rates, your job (yes employers are checking credit records these days).

Your credit score will be reduced by 200-400 points, short sale and deed-in-lieu-of 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 – “YES” Short Sale and Deed-in-lieu-of are forms of foreclosure
• Buying after a Walk Away Foreclosure
The waiting period is 7 years
• Buying after a Foreclosure
The waiting period is 5 years with 20% deposit up to 7 years.
• Buying after a Foreclosure with Extenuating Circumstances
The waiting period is 3 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.
• Buying after a Short Sale
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Short Sale with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.

In addition to the waiting period and minimum down payment, you will be required to have a minimum FICO score and 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.

Good Luck,
Bob Patrick
Buy a home after foreclosure, short sale or deed-in-lieu-of expert
Movin-On LLC
Helping families/people that have lost their homes get back into another in as little as 6 months
0 votes Thank Flag Link Thu Jan 20, 2011
Contact the attorney who handled the closing of your home purchase. His office will have copies of all the settlement documents and will be able to tell you what kind of loan you have. Beware of leters that come through the mail; I get them all the time saying I am pre-qualified for this or that. This is "junk mail."
If you want to talk with someone to advise you about a possible short sale, find a Realtor with a Certified Distressed Property Certification, as the agent in the provided link.
0 votes Thank Flag Link Thu Jan 20, 2011

The transfer of a note from one bank to another will not change the type or terms of loan you have. It will only change who you will be paying. Maybe you were mistaken or just forgot what type of loan it was.Either way,If you have received a letter telling you that you can short sale, this is telling me that you may be in default on your loan. If this is the case then you should seek help from a Realtor to help guide you through this process. Be sure that the agent has experience in the short sale process before you hire them as this is a specialized area and not all agents have the proper experience.

My company has a partnership with a local attorney that helps homeowners get through the short sale process called Safe Assist. With this program the attorney will advise you all the way through the process and negotiate for you with the lender to get you out of your current situation. And the best part is it is at no cost to you. Fell free to call me at 919-610-5203 if you would like more information.

Good Luck.

James Oksen Jr
0 votes Thank Flag Link Thu Jan 20, 2011

What is your question?

Regarding short sales, the process for an FHA short sale is very different than that of a conventional. FHA short sales may be 'pre-approved'. The process is still quite lengthy, but with FHA, you can 'front-load' all of the work so that when the time comes to get an offer, you already understand what the lender will accept. The liklihood of succeeding at an FHA pre-approved short sale is much better than most others.

Please visit my website for more information on short sales. And if I can assist you in selling your home via the short sale method, please contact me. You can click on my avatar/icon or any of the links allowed in posts.

-Drew Ludlow
Certified Distressed Property Expert, CDPE
Short Sale Specialist
Web Reference:
0 votes Thank Flag Link Thu Jan 20, 2011
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