A Short Sale is the sale of a home when sales proceeds do not fully pay off the existing loan(s) and lender(s) accepts a discounted payoff to fully satisfy the loan.
The best part, the existing lender pays virtually all sales costs, including commissions, escrow and title fees and repair costs. You get your home sold, the loan(s) paid off and you avoid foreclosure.

Mortgage lenders are increasingly willing to work with borrowers faced with a financial hardship to accept a discounted payoff on a mortgage. If you are faced with a hardship that makes it likely you will be unable to meet your obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through foreclosure.
As you consider the option of pursuing a Short Sale, remember your lender is looking to limit any potential loss on your loan. By completing a Short Sale, your lender has arrived at a solution that is, for them, much better than a foreclosure.
Bottom line, your lender wants to work with you.

Nothing. It’s true, in most cases you will pay literally no sales costs if your lender approves the Short Sale. All commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the Short Sale approval.
Remember, lenders approve Short Sales and accept the resulting loss in an effort to avoid bigger losses through foreclosure.

It’s easy. If you would like to get prequalified for a Short Sale, click here.
If you would prefer to discuss it on the phone, or set an appointment call 1-800-871-9326. There is no charge to you to get started. It is as simple as contacting us and we will get to work. If you later decide you don't want to do a short sale, that is okay too.

Deeding your property to someone without paying off the loan is nearly always a bad idea. In the first place, the lender still considers you primarily responsible for payment on the loan. If loan payments do not get paid, or if the lender ultimately forecloses, this will show on your credit.
Secondly, when you deed your property to someone else, you give up control of the property. Along with the deed goes the ability to control the property.
Do not deed your property to someone without paying off the loan unless you have consulted with an attorney.

To some extent, that will depend upon the mortgage company considering the Short Sale request. Generally, so long as the hardship is real and the mortgage company believes the loan is likely to become delinquent as a result, the Short Sale request will be processed by the Loss Mitigation Department. A big key to getting Loss Mitigation to accept a hardship is to submit a strong hardship letter. The hardship letter sets the tone for the entire file.
Below you will find a list of “hardships” that are common and frequently accepted by mortgage lenders.

• Family illness or injury
• Illness or injury in the extended family – particularly if it forces relocation
• Job relocation when the property is equity deficient
• Job loss or significant income loss
• Divorce or split of domestic partners
• Adjustment in mortgage payment or unforeseen increase in living expenses

The answer is, maybe. Some lenders will accept a Short Sale file for approval on loans that are not delinquent. Other lenders will not accept the file until the loan is delinquent. We can put your Short Sale file together within a couple days and submit it for approval. (Remember, there is no charge for this). That is the best way to determine if your lender will accept a file for approval on a loan that is current.

There are actually several reasons why a mortgage company would approve a Short Sale payoff, including the following;
Legal Concerns – Mortgage lenders have come under legal pressure to work with borrowers to equitably resolve situations where borrowers are unable to meet their mortgage obligation, particularly when the borrower makes an effort to arrive at a compromise solution.
Wall Street is Watching – Mortgage lenders rely heavily on their ability to package and sell bundles of loans on the secondary mortgage market. They need to sell these bundles of loans in order to put the funds back to work by loaning the money again and collect loan fees along the way. If mortgages perform poorly after they are sold it could impact the lender's ability to sell their loans on the secondary market. A successful Short Sale gets the loan payoff resolved quickly.
Asset Management Expenses- If a lender acquires a property through foreclosure, the property will be managed until it is repaired and resold. It is expensive to manage real property assets - homes – spread throughout the region, the state and possibly even the nation. Keeping properties maintained, keeping utilities on, making repairs and the administrative costs attached to these activities are all costs the lender would prefer to avoid. A successful Short Sale eliminates most of these costs
Reserve Requirement- Delinquent and non-performing loans place another burden on mortgage lenders. For all delinquent and non-performing loans lenders must set aside funds in reserve to deal with potential losses. These funds cannot be put to work generating new loan fees until the bad loans are resolved. A successful Short Sale lets the lender put more money to work.

In a word, no. That is why it is critical to work with someone that has extensive experience at getting Short Sales approved. From the presentation of the Short Sale package to the lender to working with the lenders Loss Mitigations Department, we know how to keep the file moving towards approval.
The first step is to get pre-qualified for a Short Sale. There is no charge for this, and it’s easy.
Just  click here or Call 1-800-871-9326.

Yes. We can work with both lenders (many times the same lender hold the 1st and the 2nd loans) to put together a Short Sale transaction. Even if the value of your home is below the balance of the 1st mortgage, we can normally get the two lenders to cooperate.
In the end, neither lender wants to own another home through foreclosure.

Absolutely. In fact, lenders are more motivated to do a Short Sale on a property that needs work than on a property that doesn’t. The lender knows the risk of loss goes up when they foreclose on a property that needs lots of work.
Aside from expense of completing the work, lenders are simply not set up to get the work done. They are in the loan business, not the fix- it business.

The big key here is to avoid foreclosure. By nearly any measure, a foreclosure is the most damaging event your credit status can encounter - worse than bankruptcy. In the course of getting your short sale approved you may miss your mortgage payments, and these will show on your credit.
By avoiding foreclosure, you will likely be able to resume normal borrowing (car loans, credit cards, consumer goods and such) relatively quickly.

You may be able to keep your home. You need to convince your mortgage company of two things:
The problem that caused the mortgage payment disruption was beyond your control – illness, injury, temporary disability or forced job change are a few examples  and now you are in a stable position to stay current on your mortgage payments and make some progress towards making up the delinquent amount. We can help you on getting lender approval on a Forbearance or Loan Modification Agreement.

A Forbearance Agreement is a written agreement with your mortgage company in which you arrange to keep your home. The agreement will normally include two primary elements: The borrower’s promise to remain current on the mortgage going forward and some plan for making up the delinquent interest and other charges. It may mean making additional payments to the mortgage company or the delinquent amount could be added to the loan to be paid later.

What typically happens is the loan will show up as "paid" on their credit report; however there will be a notation that says "settled for less than originally owed" or something along these lines. It is more favorable for a homeowner to short sell than to have a foreclosure on their credit report.

The seller cannot profit (monetarily) from a pre-foreclosure short sale. But there are always exceptions to the rule.

Most mortgagees won't consider a short sale if the homeowner is in bankruptcy...why? Because negotiating a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy.

All lenders order a BPO or full appraisal of the property before making their decision to accept or reject the short sale offer. This is their only way of assessing the value of the property.

"Due on Sale" Clause (DOS) Provision in a mortgage or deed of trust calling for the total payoff of the loan balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender's security instrument upon a sale of all or any part of the real property securing the loan without the lender's prior written consent.
For purposes of this definition, a sale or transfer means the conveyance of real property of any right, title or interest therein, whether legal or equitable, whether voluntary or involuntary, by for deed, leasehold interest with a term greater than three years, lease-option contract or any other method of conveyance of real property interests. Standard language which states that the loan must be paid when a house is sold.

If a property has what the lender would consider a substantial amount of equity, chances are they would consider allowing the property to foreclose and then reselling it closer to the retail value. Focus on homes that do not have much equity. Your job will be to create the equity in the home by negotiating a successful short sale.

Indeed there are times that lenders do not give the borrower a break. This is done in cases of buyer's remorse, when the borrower demonstrates he made a bad financial decision when purchasing the real property, or when financial irresponsibility results in funds for the mortgage payments not being available. In addition, simply wanting to get out of the real property because the neighborhood might be changing for the worse or the borrower has another piece of real estate in mind do not qualify for financial hardships that will move lenders to let borrowers off the hook. Finally simply abandoning the property or citing changes in family size have no bearing on the lender's decision to disagree with a short sale.

When the borrower has little or nothing in the way of assets, lenders are quick to agree to a short sale. As proof, lenders may request copies of tax returns and financial statements.  If the borrower does own some assets – such as cash on hand, a savings account, real estate, stocks, bonds, or a retirement savings account – there is a chance that the lender may ask the borrower to cover the difference in selling price and mortgage payoff from these funds.

Even though an approval for a short sale does not actually guarantee that the borrower will be able to unload the real property he can no longer afford, oftentimes the sale does go through. In the aftermath of such a sale, there are still some other consequences to consider. For example, the amount of money forgiven by the lender is considered income to the borrower and he must declare it on his taxes.

Minimize damaging impact to credit: Foreclosure can remain on your credit for up to seven years while a short sale usually gets reported as a “settled debt” and is significantly less damaging. With a short sale, your FICO score will not be as negatively impacted as it would be with a foreclosure, and you will be able to get into a new home much sooner as well.
Minimize financial exposure/liability: In many foreclosure situations, the lender will ultimately sell the property at a significant discount once they foreclose and repossess the property. The homeowner can then be financially liable to the lender. While the same may be true with a short sale, the difference is with a short sale the homeowner is still involved in the process and can therefore contribute their input and have more control over the sale price of the property and the potential associated liabilities. In a foreclosure, however, once the lender repossesses the property, the homeowner is typically defenseless with respect to what follows next.

As soon as you possibly can. Foreclosure situations tend to be extremely time sensitive. The sooner we can begin the negotiations with your lender, the greater the chances of a successful resolution. There is no need to wait until the lender sends you a notice of default or initiates formal foreclosure proceedings against you. Time is of the essence! Please contact us today for a free consultation with one of our specialists.

Every short sale situation is unique and follows its own timeline. Typically a short sale is completed within one to four months from the time we have a complete short sale package ready to present to the lender. Having said that, we have successfully negotiated a short sale in as little as two weeks. Timing depends on how quickly we can begin negotiating with your lender. If you are imminently facing foreclosure or even if an auction date has already been set, the process can certainly be expedited and we have even had lenders postpone the auction date. Please contact us today for a free consultation with one of our specialists so that we can be of immediate assistance to you.

As with all foreclosures, there are several potential tax and liability considerations when doing a short sale. With a short sale, however, these potential tax and other liabilities are typically less frequent and less severe.
Tax ramifications: After completing the short sale your lender may decide to issue you a 1099 for the difference between the price your home sold for and what you owed, and you can later be taxed by the IRS on this amount as income.
It is important to note that if specific criteria are met, the IRS may release the borrower from this tax liability. Furthermore, Congress is currently considering legislation that would eliminate this taxation of so-called “income” due to cancellation of debt.
Lender recourse: In some states and with certain types of loans, lenders can pursue a court decision called a “deficiency judgment” making you personally liable for the remaining amount owed to them above the short sale price. In some cases, the lender may ask you to pay a portion of the difference back in the form of an IOU.
The lender has sole discretion whether to pursue a deficiency judgment in those instances when a deficiency judgment is permitted. Unlike other loss mitigation companies that offer “basic” and “premium” services, at ALM, as a matter of course, we diligently apply ourselves to every short sale case with the goal of negotiating with the lender to eliminate a deficiency judgment, minimize your tax liability, and to consider your debt as settled.

No. The sellers provide insurable title for all properties and clear title is a contingency to close. You will receive a CLTA owner’s policy of the title insurance in the amount of the purchase price as part of your transaction. The premium for the owner’s title policy is paid for by the seller. You, the buyer, are responsible for the cost of any lender’s policy.

Only the Individual list on the NOTE is responsible for the current mortgage and any liability resulting from the Short Sale.

If it is your primary residence – No. Congress passed a law entitled The Mortgage Forgiveness Relief Act of 2007 to eliminate this tax. If the Short Sale is occurring from a 2^nd home or investment property you may receive a 1099 from the lender. It is required by the lender to submit the formal tax form, but these circumstances are individual to each lender.

If you continue to pay your bills and have a good payment history and enter into a credit restoration program and you may be able to qualify for a mortgage loan within 2 years of the Short Sale transaction. Keep in mind, your debt to income ratio must be in compliance with the mortgage lending guidelines.