Broker Bryant esplains short sales in an easy to understand post.
Well that's a good question. What do you think? Most folks would probably answer this question with a resounding YES! But...what if I told you the answer is "No....you don't necessarily need a hardship to qualify for a Short Sale. You may be able to do a Strategic Short Sale"? Heck, big buisness and lenders do then all the time.
One reason lenders/investors still approve the Strategic Short Sale is that the hardship in no way changes the financial outcome of the Short Sale for the lender. The numbers are still the same. In fact, the numbers may even be better for the lender on a Strategic Short Sale because the Seller is in a financial position to contribute. So why wouldn't they approve it?
Now while you may not have to have a hardship to do a Short Sale you may very well be required to be delinquent on your payments. This is mostly due to government intrusion into the process. For example HAFA (Home Affordable Foreclosure Alternative) requires the mortgage to be: "delinquent or default is reasonably forseeable."
Also, if you have an FHA loan: "At the time the PFS (pre-foreclosure sale) closes the loan must be in default (i.e. delinquent more than 30 days)." FHA DOES require a hardship.
If you are way upside down on your mortgage and see no light at the end of the tunnel then you have to ask yourself some hard questions. The reality is that most of us will have to move for some reason over the next 5-7 years. So ask yourself:
- If I'm upside down on my mortgage today will I still be upside down in 5 years if I have to move then?
- Would my family be better off if I took the financial hit today instead of waiting?
- If I did a Strategic Short Sale today would I be able to rent a property for my family and save a substantial amount of money each month?
- How will going through a Strategic Short Sale affect my credit and will my interest rates on my credit cards go up drastically?
- How will a Strategic Short Sale affect my job (security clearance)?
Ask yourself hard questions. Seek legal advice from an experienced Attorney. Talk to your CPA. Have a family meeting.
Then if you decide that a Strategic Short Sale is the option for you, remember, there are no guarantees it will work. You may be asked to contribute to the "Short". What I tell potential Sellers when they ask the question is... "If you have no hardship and you have assets or sufficient income the bank may very well want some of it. You may have to bring a cash contribution to closing and they may also want you to sign a promissory note. But you may very well have your Strategic Short Sale approved."
These are difficult times and they require making difficult decisions. Let me know if I can help.
Are you facing foreclosure in Florida?
Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.
Want to find out more? www.CentralFloridaShortSales.com
***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.
Copyright © 2010 http://www.brokerbryant.com/ | All Rights Reserved
I am very, very supportive of families... sellers... who are facing some sort of hardship, and because of it, have chosen a Short Sale as their best alternative. As far as sellers who opt for a Strategic Short Sale... without having a hardship, I just have great difficulty being supportive at all.
Hi Larry. I really appreciate you reblogging my article. I hope all is going well with you.
Too many people are confused about this, and I wish they would just ask a professional. THat doesn't necessarily mean their sisters realtor.