Short Sales- A Short Course

Over the past few months it seems those of us in the Real Estate world have developed a whole new vocabulary full of unfamiliar- and somewhat scary terms. Foreclosure, REO, Short Sale, Loan Modification to name just a few.

Let's start with "Short Sale". Only a couple of years ago, hardly any of us had ever heard this term, and today, unfortunately, it is an all-too-common situation. Nationally, about 11.18% of all mortgages are falling somewhere in the ballpark of "at least 1 past-due payment, all the way up the process to foreclosure. That is a staggering number!

As a Realtor, I wanted to become proficient in handling Short Sales, because I could see that this was the best way to help distressed sellers avoid the devastation of foreclosure and salvage some of their credit rating. Short Sales also help the community by keeping home values up.

So, what is a Short Sale? A Short Sale means that the lender agrees to take less on the sale of a home than is owed in order to avoid the expense of foreclosing on the property. The seller must demonstrate that there has been a hardship, e.g., job loss, medical expense, etc, that is making it impossible for him to keep up the mortgage payments. Sellers must provide documentation of income, expenses, etc., to the lender, and the lender ultimately approves the sale of the home at the lesser price. The seller does not receive any of the proceeds of the sale.

Recently, President Obama has proposed legislation that would help some distressed homeowners to stay in their homes. Some people will be allowed to refinance their mortgages and some will qualify for loan modifications. The specifics of these new laws are not totally clear just yet.

If you are a homeowner who has suffered job loss or other conditions making it very difficult or impossible for you to make your mortgage payment, don't hesitate to contact a knowledgable Realtor or Lender who can help you navigate through the process. Don't avoid the issue. If you are having trouble, talk to someone who can help you.

Enjoy the weekend and the beautiful sunshine!

Linda