Home Selling in Prior Lake>Question Details

Torn, Home Seller in Prior Lake, MN

How hard is to get a short sale to get approved if you are current on your payments?

Asked by Torn, Prior Lake, MN Tue Dec 21, 2010

Help the community by answering this question:


Cameron Piper’s answer

It doesn't appear that you or your company are licensed in Minnesota. I'm sure you wouldn't be soliciting business in Minnesota without a license.... Would you?

Cameron Piper
Web Reference: http://www.campiper.com
1 vote Thank Flag Link Tue Dec 21, 2010
Anna gave a great response. It's always a good idea to consult an attorney about your situation.

Many short sales are approved for people who are current. The key is to demonstrate that you have a hardship that will soon prevent you from further payments and not enough assets to cover any loss in principle that a normal sale would entail.

If you are looking for a Realtor with short sales experience in the south metro and have additional questions let me know if I can help.

Bill Wallace - Realtor, CDPE
RE/MAX Results Apple Valley
1 vote Thank Flag Link Tue Dec 21, 2010
Hello Torn,

I am just following up with you to see how is your current situation?
Are you still facing financial hardship?

If so,

I have completed several hundreds short sale with one and with 2 lenders successfully.
I can help you in your situation.
Regarding your second lender, we must negotiate the proper outcome which is full and final satisfaction with the second lender otherwise there is a potential outcome of a judgment.

It is all up to negotiation outcome. I am a strong negotiator and can help you in your situation.

There is NO cost for our services to you at ANY time.

I negotiate all my short sales myself and specialize in foreclosure and short sales. I am also CDPE and SFR certified (Certified Distressed Property Expert and Short sale and Foreclosure certification).

Presently, I work with lenders in helping distressed homeowners options to keep their homes.
As an experienced real estate agent, I know what it takes from start to finish helping a family facing financial difficulties. I bring expert knowledge, valuable experience blended with the latest technology, a well-defined marketing plan, a comprehensive network, energy, enthusiasm and the excitement of a job well done.

I would love to help you with your home.

Please contact me today.

My contact info is below.

Thank you,
Ravit Berg.
Ravit Berg @ RE/MAX Results

Cell - 952.334.4179 | F - 651.460.1272
ravit_berg@hotmail.com | https://www.facebook.com/ravit.berg
0 votes Thank Flag Link Tue Jan 31, 2012
Hey, Torn!
I'm sorry you're going through a difficult time. If it helps, you are not alone in that boat. You are joined by many. As a matter of fact, there are probably dozens of these boats out there!! :)

As for your situation, it sounds like you have a good case to prove a hardship. I would NEVER recommend someone become delinquent on their payments, only you can decide if that's your best course of action. I would suggest you seek some advice from a short sale expert real estate agent and attorney to make those decisions. When you know better, you can do better. Good luck with your quest for knowledge. It is, indeed, power.
0 votes Thank Flag Link Thu Jan 13, 2011
I'll just throw a little something in from my partners previous blog in AR: http://activerain.com/blogsview/1421780/short-sales-do-not-r…
If a borrower/seller is currently not in default but can justifiably make the case that it is nearly unavoidable despite their willingness if circumstances were otherwise, they can proceed to conduct a short payoff/short sale (pursuant to Freddie Mac’s Single-Family Seller/Servicer Guide, Volume 2 Chs. 64-69: Servicing Nonperforming Mortgages Chapter B65: Workout Options B65.37: Eligibility requirements (08/20/09) – this can be viewed by going to http://www.freddiemac.com/singlefamily/ and searching the AllRegs link). I'm referencing Freddie here buy the GSE's (or government owned entities) typically dance to the same tune.

Specifically, to be eligible, Freddie requires that the borrower:

1. Be experiencing or have experienced an involuntary inability to pay, unless the Mortgage is secured by a Manufactured Home and the Borrower has a buyer for the property

2. Be delinquent in his or her payments, or in imminent danger of default

3. Complete Form 1126, Borrower Financial Information

4. Be cooperative and allow access to the interior of the property for a BPO

5. Have had the property listed by a real estate broker at a price based on a market sales comparison using the as-is value with a 90-day marketing timeframe

6. Make the maximum possible contribution toward any deficiency from the sale in cash and/or a promissory note (though this will largely be governed by HAFA after April 5, 2010)

7. Not have entered into a program or arrangement where a third party takes title to the property and arranges a short payoff in exchange for a fee

8. Waive reimbursement of any Escrow, buydown funds or prepaid items and assign any insurance proceeds to us, if applicable

Loan servicers will be evaluating income to be sure that the mortgage payment, expressed as a percentage of the gross income, is meaningfully in excess of 31% or they’ll be looking for significant life changes such as the loss of a job or something of that nature. If such situations exist, according to Freddie Mac’s instructions to its loan servicers, a borrower may proceed to a short payoff without being currently in default.

AND THEN.. and most importantly: if you have been current and you meet the other guidelines of HUD's ML09-52... we can get you BACK into home ownership right away.

Steven Brand nmls# 261849
iLoan nmls# 357555
Web Reference: http://iloanminnesota.com/
0 votes Thank Flag Link Wed Dec 29, 2010
I need help with this too!Thanks Steven for sharing this info. BTW, if anyone needs to fill out a “Form 1126”, I found a blank form here:http://goo.gl/dDWFz0
Flag Mon Mar 16, 2015
I agree with Bill*

Short sales do get approved with SOME sellers who are current on payments, but everyone's situation vary because of loan type, lender, etc. Also, consider this: if I worked for your lender and if there are 200 files on my desk ranging from borrowers who were current and those who were 5 months delinquent...who's file would I be working on first?

Torn, go consult with a few short sale experts in your area! Here are the usual methods buyers use to find them: 1. google search 2. calling the largest real estate brokerages in town 3. a referral. Whatever method you use, be sure to ask them for PROOF of their experience. Preferably SHORT SALE APPROVAL LETTERS. If they can show you a good number of these...I'd say at least 3 comes to mind (that are all recent approvals), then they would be OK, the better ones will have much more.

Good luck!
Web Reference: http://www.felixhung.com
0 votes Thank Flag Link Wed Dec 22, 2010
Having worked the banking end for some 18 years as a foreclosure specialist I have found that while there may be general "rules" that most lenders follow, each one can have their own set of policies when it comes to shortsales. Until recently most lenders would not even consider a short sale if one was not behind in payments. But today more and more are open to looking at the circumstances of each case.

It sounds like you may be working with one of the "old fashion" lenders who still "require" that you be behind. The question is how firm are they on that policy. For now, it sounds like this is a requirement.

Now, no one here can suggest you fall behind on payments. Only you can make that decision. Any one of us Minnesota agents here can assist and advise you on specifics once you decide on a course of action.

And there is an alternative to foreclosure or shortsale that you might qualify for as well. If you would like to know more feel free to contact me by email.

Best wishes.

Steele V. Propp
Schatz Real Estate Group
0 votes Thank Flag Link Wed Dec 22, 2010
We very likely can get your short sale approved while you are still current, as long as there is a hardship. However, most of our clients feel that paying the mortgage during the short sale process is just throwing good money after bad. You are losing the house, and your credit will take a hit regardless. Most of our clients choose to stop paying the mortgage and start saving that money to prepare for the cost of the move.

We are a national short sale service and can help you with your specific situation. Our short sale service is FREE to homeowners. So, please give us a call to discuss your specific situation.

Short Sale Department, LLC
0 votes Thank Flag Link Tue Dec 21, 2010
I have had quite a few banks approve a short sale while the payments were current and at the same time I have had some denied for that very reason. It varies on each bank and their investors. If you have a strong hardship it shouldnt matter if you are current on your mortage as the bank should see that the situation may soon be changing for the worse.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Tue Dec 21, 2010

Hang strong and keep making the payments. You have a justified hardship and I'm sure that your balance sheet shows a severe deficiency in income over expenses - the bank will weigh that very heavily. Send me an email through my profile or give me a call (612-839-4202) I'd like to find out more about your situation and give you some better advice than this format can afford.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Tue Dec 21, 2010
You must be late on payments or the bank sees no reason to short sale the property.
0 votes Thank Flag Link Tue Dec 21, 2010
We have contacted them and they have told us that we must be late, but we would really like to stay current. We can not hang on much longer due to my spouse being out of work and no good out look that situation will change. We just want to downsize and live off one income..
0 votes Thank Flag Link Tue Dec 21, 2010

Contact Steve Nash at http://www.nash-law.com and have him give you his two cents, he specializes in this type of legal matter and has for many years – long before it was the popular thing to do.

Your ability to execute a successful short sale is tied 100% to the banks opinion on the likelihood of your property going into foreclosure. Whether or not you are current on your note is only one piece of that puzzle. I would caution you however against intentionally stopping payments. I recently had a client and close friends lose their home after the bank told them that they couldn’t help them if they were current. As a result they stopped making payments, and in the end the bank denied the short sale and my friends lost their home to foreclosure.

Good luck in your decision making process and don't hesitate to let me know if you have any additional questions. I negotiate short sales for my own listing as well as a number of other agents hire me to negotiate their sales.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Tue Dec 21, 2010
Torn, it depends entirely on the bank. A lot of them require you to be behind, but I would recommend calling them, and asking.
0 votes Thank Flag Link Tue Dec 21, 2010
Every bank processes short sales differantley, therefore it is best to contact repitable company who can walk you through the short sale process. It is unfortuatne that some banks will not accept a short sale unless you are 3 months behind in payments. It is best to first contact you bank, let them know you may be considering a short sale and how they would like you proceed.

Thank you,

Wendy Dorn
Edina Realty- Prior Lake Office
Cell (612) 749-7087
Fax (952) 447-4735
0 votes Thank Flag Link Tue Dec 21, 2010
If your home is owner occupied and you do indeed have a hardship, I have a law firm that I work with that will not charge you for their representation. Contact me directly if you are interested in connecting with them.
0 votes Thank Flag Link Tue Dec 21, 2010
It depends on certain things. Some lenders will not consider a short sale if the homeowner is current on payments, no matter what. Other lenders may consider it, but only if you can substantiate that you will without doubt have some financial difficulty in the future.

I also agree with Anna - before going down the road of a short sale be sure to consult with a real estate attorney, a tax specialist, and a real estate agent who is knowledgeable about short sales. This type of transaction is extremely complicated and its paramount that you as sellers get counsel from all of those types of people.

Best of luck!

Eli Johnson
Web Reference: http://www.eliasjohnson.com
0 votes Thank Flag Link Tue Dec 21, 2010
Only your lender can answer that question. Most of time it requires you STOP payments

However you need have short sale approved by returning required documents back to lender

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Tue Dec 21, 2010
Before considering your short sale--in order to best protect yourself an any other assets you may have, consider consulting with an attorney who specializes in real estate--as for your question--much will depend on your lender and your hardship.
0 votes Thank Flag Link Tue Dec 21, 2010
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