Home Selling in Long Beach>Question Details

Blake Lee, Home Owner in Long Beach, CA

What % of short sales get approved by banks? I'd like to sell my 2BD, 2BA condo in 90802. Underwater quite a bit. (1 Mortgage, Fixed APR).

Asked by Blake Lee, Long Beach, CA Tue Jul 5, 2011

My wife and I live in a 2BD 2BA condo in 90802 that we've outgrown. If we sold the condo, we do not have enough cash to make up the difference between sale price and what we owe the bank (single mortgage, fixed rate). We are thinking about renting it out, but we would be losing a condiserable amount of each month on rent. Also, I'd be a very reluctant landlord. We have a fair amount of cash saved, but not enough to pay off loan. What type of hardships are required for a bank to even contemplate a short sale?

Help the community by answering this question:


Ron Thomas’ answer
This is not a self serving answer, I do not want to Shortsale your property:
In fact, I don't want you to Shortsale it either; if you can possibly help it.

You didn't say how much negative you would be each month if you rented it out: Lets say that the number was $600 per month, and lets say that it took three years to either get the rent in line, refinance or sell the Condo: That would equate to a total loss of approx. $20,000.
I don't want to guess what you could write off, since it would then be a business, not your residence: You should ask your tax person what this would be; but lets hypothasize (guess) 33%. That would mean a net loss of $13,000+ which you would be trading for your credit score, a lot of sleepless nights, and the oppotunity to answer a Deficiency Judgement from your Lender.

Shortsales are intended for homeowners who have no way out, and are virtually "destitute".
Deficiency Judgements are going to be a thing of the future, (my gut tells me.)

My suggestion, if you can, rent it out and go buy another place to live in for a while. In a few years, you can adjust everything to your liking.

Good luck and may God bless.
2 votes Thank Flag Link Wed Jul 6, 2011
Hi Blake,

I have successfully closed short sales for:

-== Investors who make over $500K / year & have LOTS of money saved
== Owners who have NEVER missed a payment & DO NOT have a financial hardship
== Owners who just bought a larger home & short sell the condo! (I have one right now where we have this situation & we've received approval.

I have successfully closed MANY short sales, NOT ONE of my sellers had to take back a Promissory Note!

I have had a 100% success rate in closing short sales in California since early 2007.

Please email me directly if you would like to talk about your situation. My office is in Long Beach & I live close by too.

562-430-3053 c
Realtor Since 1996
Short Sale Expert
Main Street Realtors
2 votes Thank Flag Link Wed Jul 6, 2011
If a homeowner owes more on their property than it is currently worth and have a financial hardship then, they have growns for a short sale. Hardship can be simply defined as a material change in the financial stability of the homeowners. Hardships include but not limited to: job loss, sickness in the family, divorce, mortgage payment increase, force or unplanned relocation, credit card debts, etc. This process will allow the homeowner to avoid foreclosure and normally banks or financial institutions that hold your mortgage are accepting 99 percent of the short sales.

Best of Luck,

Maria Cipollone

1 vote Thank Flag Link Sun Oct 14, 2012
The banks approve of short sales doesnt mean they approve of the contract price. Often they counter higher than asking price and the buyer walks. Thats why most short sales fall apart. Either bank doesnt see a hardship and the seller is faking a hardship or the bank uses some formula that overprices the home and dont really care if it forecloses. There are two things here. The bank release that allows you have a short sale and the satisfaction that says you are all square with the bank. Just because a bank allws a short sale through the release process doesnt mean that they will go along with a zero satisfaction, in other words you gotta bring money to close. Good news is the bank will negotiate with your attorney to a lesser amount and get on the hook for 50% of the deficiency amount, payable over 10 years interest free uncollateralized loan.

Beware of agents that tought their CDPE qualifications! I am SFR, simialr to CDPE and still just because someone specializes in distressed sales doesnt make them an expert. ELI is right to use the MARS disclosure that say we as agents cannot promise an outcome and too many agents talk up their expertise without disclosing the downside of short sales.

As mentioned, you need to inversely qualify for your current mortgage. So if you could get the mortgage now for the condo with your current income and debt structure, and you have assets, really hard to make the case for any hardship. Assuming you want a single family house, rent the condo, for one year and rent a house. Underwriting rules nowadays wants to see a tenancy for existing property in most cases for 6 months before you can qualify for a mortgage on the new house.
1 vote Thank Flag Link Sun Nov 20, 2011
Dear Blake Lee

Hardship is often in the way you explain it. You have some positives going for you:
1. Outgrown your condo.
2. Only one bank to deal with - which is huge. As reported elsewhere, only about 60% of short sales close. However, I would estimate that 80% to 90% of the ones that do not close are ones where the first lender and the second lender cannot reach an agreement on how much the second lender is to receive. I just has a short sale approved in a week with one bank. And I had another that dragged on for a year without being resolved because the second wanted more than the first was willing to pay.

Negatives that will need to be fixed / explained:
1. Fair amount of cash saved.

One strategy might be to rent it out and then go for a hardship as the rent doesn't cover your costs.

Good luck and give me a call if I can help.

Best regards,
Gene Scott
ERA Buy America Real Estate Services
1 vote Thank Flag Link Wed Jul 6, 2011
It can be anything such as reduced hours at work/reduced income, double income turned into single income, illness, etc. The fact that potential rent will not cover the mortgage payment, taxes, and insurance. Who is your lender Blake?

Sara Mehrpouyan CDPE
Rodeo Realty
Direct: 818-903-2040
Dre license #01712757
1 vote Thank Flag Link Wed Jul 6, 2011
My office works with a few Law Firms that offer a Short Sale Legal Consul/Negotiation Service for home owners that are upside down or in default and facing a short sale. There is No Cost for the program and you don't have to be in default or behind in payments to qualify. I'm located in San Diego if you would like more information give me a call. 858-945-1047 or hlear@realtyconnections.net.
0 votes Thank Flag Link Mon Mar 10, 2014
It all boils down to your specific hardship which is causing you to become late on payments or default on the loan. Once we have established the hardship the way I was trained is I then build a package that not only has your financial information but also draws a very convincing picture to the bank as to why they should accept the short sale of your home. The person conducting the short sale must know what they are doing or the bank will eventually foreclose on the property.
Web Reference: http://bennychavez.com
0 votes Thank Flag Link Mon Mar 10, 2014
Im going to keep it short and simple. Short Sales are getting approved every day. They are fewer now than in years past but the banks are streamlining them much better now. It is imperative that you use an agent with a successful track record of closed short sales. An experienced agent can anticipate and remedy most issues that arise. This question was asked two years ago.... Please update us as to what you decided and how it worked out for you.

All the best,

Alex Montelongo/Broker
Coldwell Banker Star Realty
562-810-7387 Cell
BRE Lic #01456982
0 votes Thank Flag Link Tue Jan 7, 2014
From a different coast, but your question is valid anywhere. First thing that caught my eye .. "We have a fair amount of cash saved ...." This will be your biggest dilemma. Upside down does not necessarily mean hardship. Before you can list the house, you will have to go through a hardship test with your lender for the opportunity to sell. If, the results show you can pay the mortgage, they will say no or perhaps offer to recast the loan at a lower rate, longer term or both. If you reluctantly decide to become a landlord, the new loan terms may help you avoid a negative cash flow impact.

If I were you, I would have a local agent that understands the short sale process thoroughly. You want the best advice. They can assist you in determining hardship. Second, if you do not have a strong financial analysis background, I would talk to your CPA about tax effects of new loan terms versus staying with the current note, if short sale is not in the cards for you. You could have positive cash flow, but may be better off with the negative effect of renting with tax write offs.

Most short sale situations are pretty straight forward and easy to advise. Yours certainly is not one of them. Get some good council.
0 votes Thank Flag Link Thu Aug 15, 2013
Hi Blake, our success rate is over 90% and we have a full time short sale negotiator that I pay for. My office is in downtown LB.

I think it would best for an offline discussion as every scenario is different.

Call me
0 votes Thank Flag Link Thu Aug 15, 2013
I was just looking through old post and I noticed yours. If you were not able to refinance at the time of the post, I can certainly help you out now. You can call me at 408-352-5147 or email me at AGreer@themortgageoutlet.com. You can check us out at http://www.TheMortgageOutlet.com. I will look at your situation and present you with some options.

Alex Greer
NMLS #1056079
0 votes Thank Flag Link Thu Aug 15, 2013
The percentage of short sales getting approved by the bank depends on the agent you use. Not the banks. The banks...and I DO mean ALL of them...are APPROVING short sales day in and day out...thousands of them. I've done over 400 short sales and have gotten ALL but 5 approved, and that was because the sellers pulled out for different reasons or changed their minds...not because the bank DID not approve their sale. *in fact, in 4 of these..we already had bank approval.
Normally you need a hardship....there are tons of reasons for a potential hardship...and to show you how much the banks want to DO SHORT SALES right now and HELP sellers avoid foreclosure...
the banks are NOW as of NOV. 1st, 2012...allowing homeowners to do a short sale WITHOUT being delinquent at all in your payments....you can be totally current AND do a short sale.
The banks will start accepting what is called a "Strategic Default", meaning basically a walk away ...your hardship is that you are UPSIDE DOWN and there is no equity.
Also, here in CA ..this is the ONLY STATE where the homeowner does NOT have to make any CASH contributions in order to get the short sale approved...the homeowner pays ZERO!
Also, you cannot be forced to sign any promissory notes at all anymore here in CA.
In addition, the short sale is FINAL...meaning the bank will give u a letter showing the debt is SETTLED in FULL for less than what was owed...this is final...and it is NOT on your credit as a charge off..but SETTLED IN FULL.
The short sale is FINAL here in CA, meaning once you close escrow, your lender can NEVER pursue you for any deficit amounts AFTER the short sale...EVER! It is final.
There are tons of incentives now that the banks are willing to give more than ever...because of the huge 28 billion dollar lawsuit recently...where the banks were found guility of securitizing and selling off many loans... to other investors...they are now willing to give YOU the homeowner
a minimum of $3000 to up to $35,000 relocation assistance money....
They were never doing this before like they are now...
They are doing this because they have been sued by thousands, and have been ordered by HUD to help homeowners and are being watched...so they have changed their tactics.
As of this email I am writing today...Chase bank alone has over 10,000 lawsuits actively against them for wrongdoings with homeowners loans and the foreclosure process...
But most people do NOT have the monies to SUE their bank..which costs thousands and takes months and months of time....
So YES..you CAN do a short sale...pay ZERO.... WALK AWAY....Have all deficiencies waived...
and still retain your credit...
My door is open.... you can call me just to ask as many questions as you wish for free....
there is NEVER a charge for advice or to do a short sale ever....
if anyone charges you any money... RUN!!!
Sheyenne Schultz
Real Estate Network Group
Short Sale & REO/Bank Owned Specialist
Over 400 short sales approved.
310-429-4170 shy@shysells.com
0 votes Thank Flag Link Sun Oct 14, 2012
go to Amazon and buy "The underwater Social" book. This will give you all the answers your not finding anywhere else.
0 votes Thank Flag Link Tue Sep 25, 2012
Hi Blake,

New Short Sale rules will be in effect Nov.1 ,2012. Since every short sale transaction is completely unique, a complete free analysis would benefit you . Typical hardships are loss of work, disability, divorce ,illness and lack of ability to pay. For example, you can still Short Sale a home without being late on the mortgage payments. In addition, since the Short Sale Rules are changing right now,you may be able to do a short sale without having a traditional hardship reason. Especially if you need to downsize right now , that may be a plausible reason.

I am a Short Sale Specialist and would be glad to review the specifics and see if you qualify for a short sale. Please take a look at my short sale information site, http:'' http://;www.losangelesforeclosuresolutions.com for more details of types of hardships.

In addition, depending on who your lender is and when you actually took out your loan will be important to know. Each bank has their own specific guidelines on how they decide if you qualify for a short sale. Please feel free to contact me directly at info@losangelesforeclosuresolutions with more details of your specific situation.

Looking forward to evaluating your situation and providing you with options in order to short sale your home. Lastly, you may even be able to qualify for relocation monies at no cost to you and depending on who your lender is ...the cash back short sale incentives range from $3,000 to $30,000 (FREE MONEY) for successfully completing the transaction.

Blake, I specialize in Short Sales . I am certified by HAFA and the National Association of Realtors as a Short Sale and Foreclosure Resource. Contact me for a private free consultation at 323.608.4881.

Anna Maria Kitras ,Broker Associate- KW
Certified Short Sales & Foreclosure Resource, SFR
Certified HAFA Specialist, CHS
0 votes Thank Flag Link Sun Sep 2, 2012
HI Blake call me and we can discuss your situation. In most cases I think it's better to get rid of the upside down asset, keep the rest of your credit profile current if possible and re-visit the R.E. market in a couple of years. I have clients who have made out well doing that. I recently sold a 2-bedroom condo on Junipero in LB after the couple haggled with their bank for over three years to get a loan mod. They were paying $2100/mo for something that was renting for $1100....Without a principle reduction which the bank was not willing to offer, it did not make any sense to stay there. They are much happier now living within their means and in a better location.
All the best,
0 votes Thank Flag Link Wed Aug 29, 2012
Hello Blake,
That's quite a dilemma you have there.
The good news for you right now, if your property is underwater thats considered by the bank as a hardship. They changed quite a bit.
The bad news you can't buy for at least 3 years once your place was either sold in a short sale or foreclosure.
The advice about renting your place is your other alternative which might be difficult since you own a house and the banks will suspect that once you bought another one then you might either go for short sale anyway.
Have you tried for the harp 2.0 program?
If you get approved and the payment is manageable then the propspect of buying another house might be better.
Contact me if there's anyhting I can do to further explore all your options.
Good Luck.

Roberto Gosim
Century 21 ACtion!
Long beach, CA 90806
0 votes Thank Flag Link Wed Aug 29, 2012
Just being "short" on your sales price may not be enough of a hardship. Refinance(HAFA) or another type of assist to lower your monthly payment is probably the best plan. Investigate all options first!
0 votes Thank Flag Link Mon Nov 21, 2011
Good luck here! We advise our buyer clients like this:

A word of caution on short sales, Three signatures (bank, seller, buyer) are required for short sales. Bank has no obligation to accept a contract between a buyer and the seller. We advise our clients to stay with bank-owned real estate (REO). Short sales usually go for way more than they list at anyway. We have witnessed banks reject multiple offers over list price and re-list at a higher amount. Meanwhile, your earnest money deposit is at risk and if you get tired of watching other properties pass you by and pull-out..your deposit is gone. Stay with REO's, post-foreclosure, not pre-foreclosure.
0 votes Thank Flag Link Sat Nov 19, 2011
As you can see from the answers you received, their are many varied opinions. I would suggest you check with a realtor that hold a certifed graduate certificate with CDPE, the most recognized certified training course on the subject. There will be serveral in your area. Feel free to download any of the information from my web site, all free. You cand then do a search in your area for an agent that offers the same information I have sent you.

I wish you the best!

Rick Frissell aka Red Baron Realtor
0 votes Thank Flag Link Sat Nov 19, 2011
Alert, loan mods count as a foreclosure and most likely a 3 year wait to buy the next house.

Well, there needs to be a hardship or the lenders most likely will not approve a shortsale. Most lenders count a shortsale as a foreclosure so in that case you would not be able to buy a new house.
0 votes Thank Flag Link Thu Nov 17, 2011
SInce you obviously can afford the condo, walking away is not what I would suggest. Since you won't be able to buy again for at least 2 years not to mention the hit to your credit. You are in a tough time and it calls for tough action. You may be able to modify your existing loan to lower your payments enough in order to rent it out. I work with one of the best loan mod guys in Southern California. He charges nothing to evaluate your situation and advise you on a course of action.

Also if you want I can give you a free home evaluation to determine the exact value of your condo at this time and we can project it into the next 12 months.

Call me: 310-756-2419
Web Reference: http://kwrealtors.jigsy.com
0 votes Thank Flag Link Thu Jul 7, 2011
You can do a short sale on this property. If you're upside down, we can likely make it happen. Hardship, or not, we typically get the file closed. Feel free to give me a call anytime, and I would be happy to explain the process to you.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states

MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes Thank Flag Link Wed Jul 6, 2011
Hello Blake,

The REMERGE Short Sale TEAM successfully closes 99% of the short sales that we have taken on. Its usually not the bank but the buyer or even seller who change their minds too late to save the short sale. Thus the 1%. Banks seems to be more eager and better automated to work short sales more quickly.

Short sales are not regular sales. Deals fall a part because the listing agent does not prepare the buyer and offer to properly account for all possible liens. So, the listing agent that you select DOES make a difference.

Probable success starts in properly structuring the buyer's offer and then negotiating that offer with the bank. It is important to complete (and not overdo) short sale package. We provide that to you. We write the hardship statement based on a phone interview. Check out web site for our track record.

I'd be happy to help you.
Shelly Gorenstein, Broker
REMERGE Real Estate
0 votes Thank Flag Link Wed Jul 6, 2011
Hello Blake:

Banks are approving more short sales than ever before, but the success of the sale is very dependent on the agent's diligence even more so than their experience. I've been working with short sale situations for over 20 years. We currently have properties on the market in 90802, we also do property management. Before you jump on the short sale bandwagon you should get sound advice on your situation and explore ALL your options. You need to think of where you're going and how to get there as the biggest part of the equation.

It may be possible for you to re-negotiate your loan. Although you've "outgrown" your condo, that won't be a good enough reason for you to short sale it and walk away WITHOUT financial consequence. You also do not want to wind up in foreclosure because some well meaning person told you to stop paying your mortgage. Talking with the lender may not be of value as the lender only wants to collect the debt, not regard your circumstance.

Before you take another step, I offer you a FREE consultation with our legal staff at HHA "Homeowner's Help Advocates" Ask for Gary or Alaina. You'll get a Free consult with an attorney, well qualified in every aspect of current real estate issues and solutions. From there you will be able to make the best decision. Call HHA at 866-386-5333 or 916-769-0019
0 votes Thank Flag Link Wed Jul 6, 2011
Blake, the fact that you were up at 11:30pm thinking about this, indicates to me that you are "Concerned"... Statistics are not what you need, "Assistance" is =) Our Team is amongst the very best Short Sale Butt - Kickers in the Biz, we have a Specialist on staff that consistently "Knocks it out of the Park"! Most of all, we really care about people, and we love this city =)

If those are traits you connect with, please allow us the pleasure of assisting you in this?

The Coastal Team
Coldwell Banker Coastal Alliance
0 votes Thank Flag Link Wed Jul 6, 2011
Hi Blake, there are already some great answers here. But you'll note that you've been told outgrowing your condo probably doesn't qualify as a hardship -- and that it does. And that's part of the reason that the California Association of Realtors (CAR) reports that fewer than 3 in 5 short sales close. There are a lot of misconceptions about short sales. The elements of a successful short sale are: Negative equity; lack of sufficient funds for the homeowner to make the difference; financial hardship; a lender that's willing to work with you; and effective communication between your Realtor, your bank, and you. It's possible that you may qualify for a short sale. Who your bank is will be one of the factors as some banks tend to be easier to work with on short sales than others. Who your Realtor is will be another factor in how successful you are. Our team has a very successful track record for closing short sales. If you do decide to pursue a short sale and you hire a Realtor, ask about their percentage of successfully closed short sales and ask for references -- and check them.

We've developed a website specifically to help homeowners like yourself, and a free e-book on short sales. Check it out and if you have any additional questions, feel free to call me at 562-896-2456.
0 votes Thank Flag Link Wed Jul 6, 2011
HI Blake the other answers here are correct, a lot depends on who your bank(s) are, the reason for the short sale request etc...We just got an approval on a 2-bed 2-bath condo in 90804 Long Beach that had an outstanding balance of $305,000(what the homeowner paid for the condo) for $90K!!! Yes the bank is taking it in the pants, but the homeowners tried everything to work with the bank to modify the terms. It's kinda funny the bank didn't reach out to the homeowners to keep them in the property as they probably would have if payments and negative equity could have been adjusted. I do have to say in this situation the second mortgage would only settle if the sellers signed a promissory note for $4,900.00 payable over ten years at no interest. All in all a pretty good deal to wipe out $305,000 of debt!
Call us if you need any help, we do this all the time.
Brad Cummings
0 votes Thank Flag Link Wed Jul 6, 2011
Mr. Lee, My understanding is that approximately 3 out of 5 of short sales are approved by banks. Our team closes over 90% of the short sales we list. The banks consider many reasons and will want to look at your whole financial picture. I did close a short sale last year for a family whose hardship was that with an additional child they had outgrown the place. I would be glad to meet with you to discuss your options. Take a look at the website below for more information.
0 votes Thank Flag Link Wed Jul 6, 2011
I can help. There is always a solution for every problem.
Please give me a call to talk about your personal situation and what is the best option to solve your problem.

Michelle Rosca
American Investor Properties, Inc.
DRE License # 01294012
Direct: 562.552.9600
0 votes Thank Flag Link Wed Jul 6, 2011
More importantly... What are your odds of getting approved?

A 10 min conversation with our professional short sales negotiators
in Long Beach will let you know if your odds look good.

We have a great track record and successful clients that are willing
to share their positive experience with you.

Please be bold enough to reach out to us and we will help you. =0)
0 votes Thank Flag Link Wed Jul 6, 2011

DIfferent banks consider different things a hardship. I recently worked with a client who had outgrown his 2/2 condo in Long Beach - and that was basically his only hardship. He had an FHA loan, which requires a higher level of scrutiny for short sale approval, yet he was still approved to do a short sale.

The main factors in the success of your short sale are:
1. The lender
2. The mortgage insurer (if you have one)
3. The listing agent/negotiator.

Let me know if I can be of further assistance. Sometimes a 3 way call, with you and your bank, can answer this question quickly. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
0 votes Thank Flag Link Wed Jul 6, 2011
Hi Blake,
The process to prove hardship is very similar to the process to get a loan. The lender will look at all the same things (tax returns, paychecks, bank statements) to 'unqualify' you. In other words what changed from the time you were given the loan. If you can no longer afford the loan, the lender may approve the short sale.
Hope that helps,
Web Reference: http://ocnorth.com
0 votes Thank Flag Link Wed Jul 6, 2011
I can tell you that outgrowing a unit is not a hardship.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Wed Jul 6, 2011
There's many options out there and short sales are extremely common in today's market. Two important factors are who the lenders are and the types of loans. It doesn't sound like renting would be in your best interest right now especially if you would be loosing money every month. I would definitely sit down with a Realtor and review the details of your current loan and the goals you and your wife want to accomplish. Best wishes to you! :)
0 votes Thank Flag Link Wed Jul 6, 2011
Hi Blake,
To answer your question, according to the California Association of Realtors (CAR), and this is a direct quote from a recent CAR article:

"3 of 5 short sales transactions close, according to statistics from a recent survey of 2,150 California realtors."

Please don't let this article discourage you because there are many possible reasons why they did not close.

For a bank to consider a short sale, it can vary- job loss, divorce, health problems, any true hardship. It also depends on the lender of your mortgage.

You mentioned renting your condo, and that may be a good idea, as long as you don't lose too much money each month.

Please call me anytime to discuss some options about your home.

Ursula Rhee
DRE # 01414016
Remax College Park
562-599-1267 office
714-390-4547 mobile
0 votes Thank Flag Link Wed Jul 6, 2011
Blake, you should download my free ebook on short sales called,
Web Reference: http://Nationalbailout.com
0 votes Thank Flag Link Wed Jul 6, 2011
Relocation, loss of income, divorce, illness, most types of financial hardship, growing family beyond home's capacity, and maybe the reason you want to move is enough. It depends on the bank and type of loan. I'd be interested to know if your loan is a Fannie Mae or Freddie Mac loan. I'm a Certified Distressed Property Expert and I am an official teacher of the Ca Asooc of Realtors Certified HAFA Specialist course. I would be happy to discuss your details privately. Please feel free to call me. 563-293-3146 or 714-865-1050
0 votes Thank Flag Link Wed Jul 6, 2011
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