If you are in trouble or going to be in trouble with your home loan it is time to figure out what to do next.
List with an agent that knows what to do
Step 1
First of all you want to contact your lender. You want to tell them what is going on why you can pay your mortgage. At that time they may ask you what has changed to get you to the situation. If it is a job loss or reduction in time at work. A lay off. You will need to explain what has changed. They will ask you to send a letter to explain the changes in your life. Has the rate changed so you are having trouble with the payment. Why now can't you pay?
The will ask for documentation of your income. They will ask for tax returns.
They are going to ask you if you want to stay in your home. If you have tried to sell your home. The sooner you get in contact with them the better if you have or are going to stop paying your payment. That way you have a better chance of working things out before you are to far behind and they start foreclosing on the home. Are you currently living in the home? Do you have it rented out or is it vacant? If the lender has determined that they are not able to do a loan modification of your loan to keep you in your home then the next step would be to is list the home for sale.
But I owe more then the home is worth right now. Guess what your not alone on this. With want has happened in the real estate market because of all the foreclosures and short sale many property values have gone down. You would have to do what is called a real estate short sale.
What is a short sale?
A real estate short sale is a form of agreement between the seller of a home in the beginning stages of foreclosure and their lender, allowing the home to be sold for less than the existing loan balance outstanding. The mortgagee would accept less than the loan amount in order to avoid a foreclosure proceeding. This short sale would result in a substantially discounted purchase price for the buyer of the home. The buyer would then proceed with the purchase of the home much the same as in any conventional realty transaction.
Why would I want to do a short sale instead of walking away from my home?
Well if you let your home go into foreclosure it would hurt more credit scores more then if you sold it on a short sale. But I don't want to purchase another home anytime soon. So why would this hurt me? Yes your credit scores were used to purchase your home but also is used to purchase a car or your credit cards. Well I don't want any of them. Well that is fine how about car insurance your cell phone it can even go against you getting a job. Some employers check your credit before they hire you. So you want to protect your credit as much as possible at this time. By doing a short sale your lender will state that it was paid but may reference that it "settled for less than originally owed" or something similar. It is certainly more advantageous to have the short sale referenced than to have a foreclosure on their credit report.
OK I see why I need to sell. What do I do next?
First you need to find an agent that know how to do a short sale. Knows how to work with the lender know what information that needs to go to the lender. Know how to work with another agent that will bring in an offer. An agent that know how to price your home for a short sale.
Know if you have additional loans on this home. Do you have judgements? Do you owe on property taxes. What they lender may add to the short sale and what they will not.
You may receive a letter from you servicer about this. They will want you to list your home with a real estate agent.
Remember every state is different the way the handle a foreclosure. Make sure your agent knows the time frames in your state. Lenders first question is "is the homeowner still living there." They have different programs today and sometimes they are able to offer the homeowner cash for keys.
I would be more then happy to help you get you through this process. Email me at
Debbytrealtor-milwaukee@yahoo.com
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