Frequently Asked Questions
What is a Short Sale?
A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property. It usually occurs when a borrower can no longer afford to make the monthly payments. If this happens, the lender will often accept the lower amount as a full payment.
Is a Short Sale the same thing as a foreclosure?
No, Short Sales and foreclosures are very different. They are often confused because of a couple of common traits: 1. The seller will leave the house without any proceeds of a sale and 2. Both will have a serious negative effect on your credit score. The truth is, however, most people feel that since they are going to have to move out of the house with no money, they may as well skip the pressures and responsibilities of the Short Sale and just give the house back to the bank. The thought is that if they aren't getting any money back, why bother? This can be a HUGE mistake. Most families who can no longer afford an "upside down" mortgage would see big benefits of the short sale compared to the foreclosure. Click here for more details.
Why should I consider a short sale instead of letting my home go into foreclosure?
There are several reasons to consider a short sale instead of foreclosure.
Although you will take a hit on your credit report, it's not quite as bad as the hit a foreclosure will cause.
If your short sale is negotiated properly, the bank will never come after you for any losses they may incur.
Satisfying the debt through a short sale may help avoid going through the embarrassment of finding your home in the "forec
What is HAFA?
HAFA is a government program designed to help home owners who are facing short sale or a deed-in-lieu of foreclosure situations. It is an extension of the Home Affordable Modification Program (HAMP), which was designed to help home owners stay out of foreclosure. If HAMP doesn't work, the home owner will have 30 days to apply for help from HAFA. This program will give a small amount of cash to both the lender and the home owner to help them get through the process. The stipulation is that the lender must accept the short sale amount as final payment (in other words, they can't come after the home owner later for money that was lost) There is a lot to this program, so here is a link to a site that does a nice job explaining it all.
Get our free HAFA brochure e-mailed to you.
Get our free HAFA brochure e-mailed to you.
What is a deed-in-lieu of foreclosure?
This is also known as a "friendly foreclosure". It's a foreclosure that is voluntary. The home owner simply turns the home back over to the lender. This avoids the stresses and expenses of a forced foreclosure.
