Ginthner & Associates - Windermere Real Estate
Specializing in Results
Windermere Capitol Hill 1112 19th Ave E Seattle WA 98112 206-324-8900 | Email: contact@ginthner.com
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Short Sales -Tips for Sellers
Short Sale Options
- Short Sale options from Fannie Mae
Together, foreclosures and short sales made up 31 percent of sales in May 2010.What is a short sale?
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.
Why is the number of short sales rising?
Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.
A short sale can also be the best option for homeowners who are upside down on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.
Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.
A short sale can also be the best option for homeowners who are upside down on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.
New government incentive program - Home Affordable Foreclosure Alternative (HAFA)
On April 5 2010 government incentives and uniform procedures became available for eligible homeowners considering a short sale. The Home Affordable Foreclosure Alternatives Program (HAFA) requires that homeowners meet the minimum requirements under the HAMP Program, an existing government assistance program for homeowners requesting loan modification from their lender. The basic eligibility criteria for HAMP (Home Affordable Modification Program) requires: 1) Home is your principal residence; 2) Loan was originated before 2009; 3) Loan is delinquent or default is reasonably foreseeable; 4) The balance is no more than $729,750; 5) Your monthly payment must exceed 31% of your gross income.
The program improves the short sale process by creating standard processes, documents, timelines/deadlines and allows borrowers to receive pre-approved short sale terms before listing the property. It also provides financial incentives: $3,000 for borrower relocation assistance; $1,500 for lenders to cover administrative costs; and up to $2,000 match to investors for subordinate lien holders.
On April 5 2010 government incentives and uniform procedures became available for eligible homeowners considering a short sale. The Home Affordable Foreclosure Alternatives Program (HAFA) requires that homeowners meet the minimum requirements under the HAMP Program, an existing government assistance program for homeowners requesting loan modification from their lender. The basic eligibility criteria for HAMP (Home Affordable Modification Program) requires: 1) Home is your principal residence; 2) Loan was originated before 2009; 3) Loan is delinquent or default is reasonably foreseeable; 4) The balance is no more than $729,750; 5) Your monthly payment must exceed 31% of your gross income.
What are the next steps?
Call us at 206-324-8900 or email us at contact@ginthner.com and we will send you more information.
- If you believe you can make modified payments and keep your home, contact your lender to see if they will consider modifying your loan. They may have a program that will help you stay in your home.
- If not, we will help you put together a short sale package to submit to your lender. This usually requires information about your hardship circumstances, your income, assets and liabilities, a comparative market analysis of your home, and a letter from you authorizing us to work with the bank on your behalf.
- Your home is listed for sale and when an offer comes in we submit the listing and offer information (including the buyers preapproval letter) to the bank along with your short sale package above.
- Then patience. It is not uncommon for the bank to take 60 - 120 days to issue a short sale approval letter. Many buyers bail out during this process, but with the right price, you will have other offers in the wings.
Call us at 206-324-8900 or email us at contact@ginthner.com and we will send you more information.
