Short Sale San Diego Real Estate
June 21, 2011 By
What Caused So Many Foreclosures And Short Sales In The Real Estate Market?
There are a few different ways to go about purchasing a home. Generally, homeowners have to take out a home mortgage to buy a home, and that mortgage has to be repaid in monthly or regular payments. If the homeowner ends up not being able to repay the mortgage with those payments, the home can be seized.
In 2007 the real estate market suffered a huge crash. This resulted in many homeowners being unable to keep up with their mortgage payments. This in turn causes foreclosures.
A main reason for so many defaulted payments was because when borrowers were having a hard time making payments they had very slim changes of being able to repay it. The only option was refinancing the home with a lower interest rate, which many mortgage lenders were not willing to do because of so many foreclosed homes.
Since the real estate market was in an up market before the crash, homeowners ran in to trouble keeping up with paying the mortgage bill. They couldn’t just sell the home and purchase a more modest one. That was no longer an option, since there was no profit to be gained in selling a home in a down market.
As home prices decreased, interest rates increased. It increased so much that foreclosures continued to happen at a high pace. Homeowners were kicked out of their home, and then the institution that lent the money in the mortgage would auction the home themselves. The home would still go at the lower price, however. The large amount of foreclosures caused the government to step in.
This is where short sales come in to play. A short sale is when someone sells a home at a price that is much lower than what the homeowner originally bought the home for. The original homeowner’s pending mortgage payment was much higher than what the selling price was going for, but the lenders accepted the initial price to avoid expensive foreclosures and long repayment options.
Short sales are most often considered the better option for a homeowner. While there are still negative outcomes of short sales, the negative aspects are generally considered a much better option than a foreclosure.
For example, after a foreclosure if a homeowner wants to get a new mortgage loan they need to wait nearly five years typically before they can qualify. Short sales, however, usually take around two years. Also, because of the Making Home Affordable (MHA) Program, short sale owners get an allowance of ,500 for relocation expenses, and are usually exempted from any taxes on the forgiven amount of the real estate sale.
Short Sale San Diego 2009
June 21, 2011 By Leave a Comment
Tips for Negotiating a Wells Fargo Short Sale
“A Wells Fargo short sale is a way for troubled borrowers to avoid losing their homes in a foreclosure. In a short sale, the bank agrees to accept less than the amount owed on a borrower’s mortgage, allowing him or her to sell off the home at a discount. Often, this makes more sense to Wells Fargo than foreclosing, as they tend to lose less in the process.
Banks have been put on the spot for being less than efficient in helping consumers, but the Wells Fargo short sale is known to be among the fastest in the industry. In fact, one can complete a short sale with the bank in as little as two months, instead of the six or more it usually takes with other lenders. If you’re considering a Wells Fargo short sale, here’s a simple guide to help you get started.
Prepare Your Hardship Letter
Wells Fargo short sale officials put a lot of weight on the borrower’s hardshipa”they want to know that your only option is a short sale and you’re not just taking advantage of market conditions. Your hardship letter should explain in detail how you fell behind, and how a Wells Fargo short sale can help you. Make sure you’re able to back it up with the right documentation, such as dismissal slips, medical bills, or divorce papers.
Find A Good Agent.
You need to list your home with a qualified real estate agent before applying for a Wells Fargo short sale. The listing agreement is one of the main requirements in the short sale package. Find an agent who has specific experience in short sales, particularly with Wells Fargo, as they’ll be more familiar with the
system and in-house policies.
Check Your Home’s Value.
Wells Fargo recommends short sales for people who cannot or do not want to stay in their homes, and whose homes have depreciated. Your agent can draw up a comparative market analysis of similar homes to give you a basis of comparison, which you can use to help your Wells Fargo short sale case. The bank is more willing to work with borrowers who have underwater mortgages than those who still qualify for other alternatives.
Market Your Home.
Like other major banks, Wells Fargo has tightened its rules in closing deadlines. You have to complete your Wells Fargo short sale before the date set in the agreement; otherwise the bank will choose to foreclose. Try to get your Wells Fargo short sale home viewed by as many buyers as possible, and work with your agent to negotiate with buyers for the best possible deals.”
Short Sale San Diego County
June 20, 2011 By 10 Comments
Help From Orange County Short Sale Specialist
In addition to bank foreclosures, short sales may often be bought for a discounted amount. Because short sales can lead to complicated transaction, it would be advisable to seek help from an Orange County short sale specialist (provided you are a resident of Orange County). A short sale is defined as an agreement in which the mortgage owner agrees to accept a payoff on the loan less than the loan balance if a suitable buyer for the home is found. Most lenders agree to adhere to a short sale simply because they get a higher portion of the loan balance when compared to the amount that they would have received from selling a property after foreclosure. In almost all cases, homeowners interested in a short sale need to meet several criteria to qualify. They are as follows:
* Homeowners must be behind in their mortgage payments
* Homeowners must offer evidence of economic adversity
* Homeowners must have little equity or no in the property
A short sale isn’t a typical real estate transaction. In the case of a short sale, all parties, together with the loan servicer of the seller, a housing counselor, mortgage investors, junior lien holders, as well as insurers, may be engaged.
Short sales are often considered to be a hassle in the recent market. Homeowners may not be informed the time of the sale, and the bank often takes time to make a decision to accept the homeowners offer. Despite this fact, is believed to be a cost saving and practical approach for all parties engaged with the proper guidance of an Orange County short sale specialist.
Short Sale San Diego California
June 20, 2011 By 10 Comments
Short Sales and Your Credit
When considering a short sale, be aware of how it affects your credit and your ability to acquire another mortgage down the road. If you intend to buy again, a short sale may mean that you have to wait a shorter time and get a better interest rate than if you go through foreclosure.
A short sale will affect your credit negatively, but the long-term effects are not nearly as bad as having a credit report stamped with “Foreclosure”. Having that on your credit report is like having a huge pimple on your face. Lenders just can’t help but notice that it’s there. A short sale at least shows that you were proactive about your mortgage.
The way that FICO determines the effect of any change to your credit, positive or negative is based on a number of different data. There’s your payment history, your debt load, the amount of time that you’ve had a credit history, any new credit you’ve obtained and the type of credit you use. Of course, your payment history reigns supreme here, followed closely by how much you owe. No single factor determines your credit score.
If you short sell your home, your FICO score may take a dip comparable to foreclosure – possibly up to 300 points. Any “not paid as agreed” accounts are considered the same to FICO. This can stay on your record for 7 years, impairing your ability to get considered for a decent loan.
The main advantage of a short sale is the amount of time that it will take another lender to consider you for a loan. You will be able to buy another home for a workable interest rate a lot more quickly with a short sale than a foreclosure. The average is within 2 years as opposed to 3-5 years.
If you view this event as an opportunity to rebuild your credit in the interim between the short sale and purchasing another home, it’s possible to improve your credit in under 2 years. Over time, the negative impact on your score lessens. Keep on top of your debt and expenses and you may find that you are a homeowner again a lot quicker with a short sale.
When considering a short sale, be aware of how it affects your credit and your ability to acquire another mortgage down the road. If you intend to buy again, a short sale may mean that you have to wait a shorter time and get a better interest rate than if you go through foreclosure.
A short sale will affect your credit negatively, but the long-term effects are not nearly as bad as having a credit report stamped with “Foreclosure”. Having that on your credit report is like having a huge pimple on your face. Lenders just can’t help but notice that it’s there. A short sale at least shows that you were proactive about your mortgage.
The way that FICO determines the effect of any change to your credit, positive or negative is based on a number of different data. There’s your payment history, your debt load, the amount of time that you’ve had a credit history, any new credit you’ve obtained and the type of credit you use. Of course, your payment history reigns supreme here, followed closely by how much you owe. No single factor determines your credit score.
If you short sell your home, your FICO score may take a dip comparable to foreclosure – possibly up to 300 points. Any “not paid as agreed” accounts are considered the same to FICO. This can stay on your record for 7 years, impairing your ability to get considered for a decent loan.
The main advantage of a short sale is the amount of time that it will take another lender to consider you for a loan. You will be able to buy another home for a workable interest rate a lot more quickly with a short sale than a foreclosure. The average is within 2 years as opposed to 3-5 years.
If you view this event as an opportunity to rebuild your credit in the interim between the short sale and purchasing another home, it’s possible to improve your credit in under 2 years. Over time, the negative impact on your score lessens. Keep on top of your debt and expenses and you may find that you are a homeowner again a lot quicker with a short sale.
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