When we launched the Ark Mortgage Assistance Program (AMAP), I really didn’t know how effective it would be. It feels great to know that we’ve helped so many people meet important goals.
Short sales have definitely become a much more mainstream strategy for underwater homeowners who want to avoid foreclosure. In fact, short sales made up a total of 5.9% of all residential real estate sales in 2013 - representing an increase of over 18% relative to 2012!
Good news for distressed homeowners! Short sale approval times are down from what they were a few years ago. Although some parts of the short sale approval process are entirely out of the sellers’ control, there is much that a homeowner trying to short sale their home can do to speed up the process. Here is what you need to know so you can get your short sale approved as quickly as possible.
There are many options for what you can do if you are underwater on your home, or delinquent in your mortgage payments. Two of the most popular options are: negotiating a loan modification, or doing a short sale. The advantage of a loan modification (if it is successful) is that you will be able to keep the home. The advantage of a short sale is that you get out of your mortgage obligation - in most cases, with tens of thousands of dollars of debt permanently written off by your lenders. How do you know which option is right for you?
There are many reasons to choose a pre-foreclosure sale instead of giving up, or waiting for your lender to foreclose on you. One important reason is that a pre-foreclosure sale (or short sale) is much easier on your credit score than having a foreclosure on record.
Part One of this series on liens explained how liens worked: what a lien is; why your lender or other creditors might have a lien on your property; and why all the liens need to be released in order to do a short sale of your home. This second installment explains exactly how to work with your lenders and your creditors to get them to agree to release their liens.
Any home with a mortgage has at least one lien associated with it. Many homes have several liens on them, between second and even third mortgages, and other liens that may been placed on the home by creditors, such as a Homeowner’s Association, or for unpaid taxes. You cannot sell your home until those liens have been released.
So, you have decided to try to sell your home through a short sale. One of the first decisions you will have to make is choosing your short sale real estate agent - or even whether to use a real estate agent to list your property at all.
Many homeowners worry about the consequences of undertaking a short sale, and paying their lender back less than the full amount owing on their mortgage. In many cases, their financial troubles are not their own fault: they fully intended to meet their lender’s terms and pay back their mortgage. But circumstances - including the global financial crisis and dropping property values, or other unforeseen events such as job loss or unexpected medical bills - have made it impossible to pay this mortgage. While many find that a short sale is the most graceful way to get out of a mortgage that they cannot pay, they also often are responsible borrowers who will likely want to re-enter the housing market in the future. So they worry:
A short sale means that you pay back your mortgage for less than the full balance owing. Why would a lender want to accept that? Why wouldn’t they just turn down the short sale request, and move forward with foreclosure?