Unless you have cash to bring to closing, your options are limited because you can’t refinance (not enough equity), and you can’t sell since the proceeds won’t pay off your existing mortgage. 

 If you are experiencing a “hardship”, and need to get out from under your house, read on.

Short Sale – Defined

Simply put, a short sale occurs when a lender(s) accepts less than the full amount owed on the mortgage.  The sale price or payoff is less (short) than the amount owed.  Although individual situations vary, the goal is for you to go to closing with no money, and leave with no money and no deficiency.  Banks are “warming up” to short sales and the number of short sales continues to be on the rise.

Hardship – No Hardship

To qualify for a short sale, the homeowner will have to demonstrate a hardship that has changed the homeowner’s ability to keep current on the mortgage payments.  Loss of equity is not considered a hardship. Common hardships include:

• Job loss
• Medical expenses
• Divorce or death of spouse
• Income reduction
• Job relocation
• Business failure

The Players

Homeowners in distress are strongly advised to engage the services of qualified real estate, tax and legal professionals.  In our experience, the success of a short sale very much depends on the persistence of the person or team working it.  Too many real estate agents take on short sales only to find themselves too busy ‘”listing and selling” to devote the time needed to see these through.  You’ll need a full time “quarterback” – someone who only does short sales.

Do Nothing or Walk Away?

At some point, many homeowners begin to question the logic of making payments on a house that is worth perhaps 30-50% less than what was paid for it.  If you are considering stopping payments and “doing nothing”, know that in Michigan, we have what’s known as recourse loans.  This means the borrower retains personal liability for any deficiency after a short sale or foreclosure, and the lender reserves the right to pursue the personal assets of the borrower via a deficiency judgment.  Primary goals of the short sale are to negotiate and mitigate any deficiency amounts, and prevent the impact a foreclosure can have on the borrowers credit.

What We Can Do For You

We offer a highly experienced short sale team to successfully transact your short sale at no cost to you.  Unlike others, our team even includes an attorney, as recommended in all real estate contracts (especially of this type), to represent you in the negotiating with your mortgage lenders to consent to a short sale of your property and to discuss with you the terms and conditions of the lender approval.  

Some of our recent transactions include:

·        Do a short sale.  Prevent foreclosure

·        List & Sell for free

·        No Realtor commissions

·        No Title Co fees

·        No attorney fees

·        No closing costs

·        Bank Pays it.

We understand you are already in financial hardship.  Our fees are negotiated with and paid by your lender – not you.  If the sale does not close, there is no fee due.  We get paid for performance.

If you feel a short sale may be right for your situation and you’ve read this far, I’m sure you have some questions. 

Please call (313) 343-8800 to discuss your situation and see how we’ll help you!

Short Sale Legal Service NEGOTIATED $187,699

Short Sale Legal Service Negotiated $136,057

One of the most important tips when attempting a short sale,  is first to price the home at a very competitive price.  Securing an offer quickly is important, because we want to stop and/or delay a foreclosure.

However, when you as a homeowner are considering a short sale, because you need mortgage debt relief, you definitely should have someone looking out for your interests. It’s crucial to have legal representation, because it is important to note that when a lender agrees to a short sale, what they’re really agreeing to is to “release the lien” on the home so that it can be sold. They are not by any means necessarily agreeing to release you from the legal obligation to pay off the remainder of the mortgage loan.

This is exactly why at Short Sale Legal Services we make sure you have an attorney who is skilled in negotiations that will negotiate everything with your lender(s), AND also importantly, provide you with the expert legal guidance that should accompany matters of such significance.

Of course, a lender does not have to agree to accept a short sale payoff. Despite what you may have heard or read, especially regarding all of the government/TARP related programs, a lender is under no obligation to accept a short sale. There are a few conditions that must be present for a lender to agree to a short sale. Chief among these are:

A. The home seller must be facing some kind of financial hardship. There are many different types of ‘hardships’ that qualify to satisfy this condition (loss of job, loss of income, medical bills, divorce, death, forced job relocation, etc.), but basically, one must be able to demonstate that their financial situation has substantially changed compared to when the mortgage was first obtained.

B. The current market value of the home must be less than the mortgage balance owed. This is ususally not a difficult obstacle for most home sellers. In fact, if this were not the case for the vast majority of home sellers accross the United States, then short sales would not be anywhere as near as prevalent as they are. Home values in the metro-Detroit area have fallen between 30% – 50% during the last few years since the financial and banking collapse of 2007.

In Michigan, especially the metro-Detroit area, it has been estimated that the overwhelming majority of all home owners who purchased a home between 2004 – 2008 are now upside-down!

Incredibly, L. Brooks Patterson and other leading business and economic forecasters have recently predicted an additional 20% – 25% drop in home values in the tri-county area surrounding Detroit.

We Can Help. No More Struggling & Juggling!

Call 313-343-8800

We are the ONLY company that provides both the real estate services that a traditional real estate brokerage does, and also makes sure that you have legal representation as well throughout the entire short sale process.

Having quality legal counsel is important, because there are so many intermediate steps where possible errors will put an immediate stop to the entire short sale process, not to mention the long term consequences that can plague you if a lender persues a deficiency judgment against you.

Read more about the benefits.

We Can Help!  End The Struggling & Juggling!

Call 313-343-8800

Deficiencies exist with Short Sales AND Foreclosures, and Michigan is a deficiency state – meaning your lender can, at their option, pursue a deficiency judgement.  From a numbers standpoint, the only remaining question is then: which deficiency is greater?

Facts as of January 2010:

Average Short Sale price was $215,300
Average REO (Foreclosure) price was $141,900

When correctly done, a short sale should yield a selling price close to market value and almost always result in a lower deficiency than an REO sale.  In addition to the greater sale price deficiency with a foreclosure,  attorney fees, maintenance fees, etc. associated with the foreclosure process are also added to the balance owed.  Other issues associated with foreclosure include longer waiting periods in order to qualify for future loans, greater impact to ones credit score and credit history, current and/or future employment problems as more employers are using credit for evaluation purposes.

Short Sale: A Negotiated Solution

A short sale is making the best of an unfortunate situation and mitigating damages to all parties.  The homeowner generally continues to live in the property (without making payments) and maintains it during the process, which helps to bring a higher selling price.  In some cases, we are able to convince the lender to waive their right to pursue a deficiency – something not possible with a foreclosure.  Add in the future lending wait times, credit ramifications and it becomes clear that the short sale is the preferred solution for those who cannot continue to make their payments.

Where’s My Loan Modification?

A loan modification is very good in theory, but unfortunately, there are very, very few homeowners who actually receive one.  

For example:  with Bank of America, as of March 2010 less that 7% of ELIGIBLE homeowners had received a loan modification!  Amazing.  

The 1^st report card (end of 2009), of the Obama administration’s foreclosure rescue plan  also showed slow progress. The Treasury confirmed that only 9% of delinquent borrowers were placed in trial modifications at that time.  With abysmal statistics like these, one should not get too excited about the idea of actually obtaining a modification, but if you have the time and hours to devote to this process – then by all means – go for it.

Based on our prior experience assisting clients with loan mods, here’s a short list of items you should be aware of (varies by lender):

• Plan on documents getting lost.  From day one, start an activity log and document everthing – the who/what/when/where/employee id#’s/ overnight delivery tracking numbers/name of person who received the pkg/confirmation the contents of the pkg got entered into their system, etc.  If at the end of the process you are denied due to missing documents, you’ll have proof.
• Make several copies of everything you send in.  Depending upon who the lender is, you may need to resend these items at least a half a dozen times.
• Don’t expect to get the same answer every time you call – or anytime you call.  This goes both ways: reconfirm good news as well as bad news.
• If making trial modification payments (which can be half of your original payment), beware of making over the phone “verbally authorized” check payments.  If an “oversight” occurs and you are charged the original payment amount, it may take weeks for your lender to try to resolve and credit you back – if at all.  Worse yet, if the “oversight” causes your checking account to become over-drawn and you do not have overdraft protection on the account, you have now missed your trial mod payment and thus your chances for a modification!
• Don’t expect accountability.  It’s possible that you might not ever speak to the same person twice.  Large lenders have call centers throughout the world!  Document – Followup – Confirm.
• Persistence is key.  Be prepared to possibly devote a significant amount of time and energy trying to unravel and understand the inner workings of an extremely large lending organization that is overwhelmed and under-staffed.  

Owed $244,000…

Short Sale Legal Service NEGOTIATED $156,000

Short Sale Legal Service Negotiated $138,899