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Short Sale–The Information You Need Regarding the Process Involved in Real Estate Short Sale, Its Advantages Against Foreclosures and How Bank of America Does It02 Aug

What is Short Sale — What are the Circumstances that Would make You Resort to It?
short sale

Are you a borrower who might be having a hard time paying the mortgages of your loans? Then you should widen your horizon and consider short sale or a Deed-in-Lieu of foreclosure as an option. These two are very similar but in this simple guide, my purpose is to define what a short sale is so let me tell everything you need to know about it. So what exactly is a short sale? For as simple definition, a short sale of real estate happens when the debtor is having a hard time paying for his mortgage and his property is therefore destined for foreclosure. As a way out, he agrees with the lender to sell it at a lesser amount in order to pay the debt. A typical sample of a short sale would be; a house with a mortgage balance of $80,000 may be sold at $70,000. Short sale is usually resorted to in order to avoid foreclosure which has higher fees and would lead to poor credit report on the part of the debtor and this has gained countrywide popularity because of its advantages. Since the property is sold at a price lower than the credit value, the debtor will still have to pay for the deficiency unless the lender formally agrees to let it go in a debt forgiveness. The laws governing the right of the lender to forgive or pursue the borrower varies from state to state. A short sale then can provide a temporary relief to the borrower.
There are a network of companies and banks like Aurora Loan Services, SunTrust, IndyMac, GreenPoint, OneWest, Nationstar, EMC, Ocwen and many others that have a dedicated department for short sale package and loan service. All over the US, you can find properties on short sale but these places are the most prominent; Phoenix, Arizona, Naples, Utah, Orange County, Burbank, Saxon, Seattle, San Diego California and Las Vegas Nevada in the west, Orlando, Tampa, Miami and Sarasota Florida(FL), Cordova Maryland, Chicago, Jackson New Jersey(NJ) and Georgia in the south , Myrtle and Minnetonka in Minnesota and Michigan in the north.

Short Sale Process–How is it done?

The steps in processing short sale involves the mortgage lender, usually a bank like Wells Fargo and Citi with CitiMortgage, agreeing with the borrower to discount the loan deficiency and sell the mortgage property at a lower price. After the property is sold, the borrower then gives the proceeds to the lender with the agreement that if there is an outstanding balance, it would still be paid by him. A short sale is usually done due to the fact the the borrower is having a hard time paying for the loan and will eventually face a foreclosure which is not a viable option.
Since a short sale is not a “mutual favor”, but rather an escape route from foreclosure, the lender usually have to evaluate the potential of the transaction. They usually have a pre-determined criteria but are willing to accept offers. One of the factors that will be considered is the amount of equity by determining the Broker Price Opinion(BPO) also known as Broker Opinion of the Value(BOV) and the probable selling price based on an appraisal.
Due to the number of losses experienced by lenders because of mortgage failure, they are mostly quick to accept short sale offers or request even if a Notice of Default message is not yet issued. On the part of the borrower whose mortgage exceeds that of the worth of the property, this is an opportunity to avoid foreclosure which affects badly his credit score. If you need some specific information like lenders guidelines, read the Fannie Mae short sale guidelines which has a pdf version that you can print. You also need to create a checklist or worksheet template of the things that you need to have so that no unnecessary delays will occur.

Short Sale Information–Things You Wanted to Ask but Never Did

If you are a first time real estate buyer, there are a few things that you need to know about short sale in order to make the proper judgment of its benefits. For one thing, this type of deal increases your chances of gaining a profit because of their relatively low price. So, if you are looking for a good way of profit generation, do not overlook a short sale. Here are some questions that are frequently asked regarding short sale and their implications:
1. How does a short sale happen?
When the borrower can no longer pay for the mortgage of the property, he would typically ask the lender for a short sale or risk a foreclosure. This is usually due to a job loss, poor financial choices or probably a pay reduction, all of which can affect his income in a negative way unless things will improve or if they can find new jobs. The lender then would review the borrower’s assets, other source of income and the letter expressing the reason for the request for a short sale. After this the lender would usually opt for a short sale unless he believes that he can gain better in a foreclosure.
2. What sort of properties are sold through a short sale?
In most cases, properties sold on short sale are single-family houses located in countryside hills and lake beach and all sorts of places. The reason behind this is that these are the individuals that are most likely to lag behind on their mortgages. Those who own condo units, luxury homes, commercial buildings and multi-family homes have income coming from rentals from their tenants so they are less likely to lag behind in their mortgages. Although it is not impossible to find multi-family homes and commercial buildings in short sale, they are just not that common.
3. Am I getting a good deal if I buy a short sale property?
In most cases, yes. This is so because these properties are usually sold at prices lower than their appraised value. Most lenders in a short sale have already accepted the fact that they will not get all their money back and so they are more likely to offer affordable prices. One of the things that you need to be careful with a short sale is with underwater homes. These are properties whose owners owe more than what their property is worth. You also need to make sure that the deal you are getting is free from fraud and scam as these are becoming rampant as the popularity of short sale goes higher.
4. How long will it take to buy a short sale?
The time it takes for a short sale is contingent entirely on the lender. The borrower in this case has no say in the process. If the lenders which is usually a bank like GMAC which is now known as Ally Bank, has a supervisor or higher management on site, you could usually get an answer within the close of the day. In most cases though, it may take a month.
5. Are upfront payment necessary in a short sale?
Upfront payments are not necessary but it is surely beneficial. Most lenders will likely accept your offer if you are apt in payment. With an upfront, you can also bargain further.
6. Is is possible to bargain for a lower price?
It is always worth the try especially if you have an upfront payment. Most lenders would rather sell at a lower price rather than risk foreclosure.
These are the things that you need to answer when investing in a short sale property. The answers to these questions will surely shed light on your judgement whether you should buy a property on short sale or not. Although this kind of investment should not be taken lightly, you don’t need a Ph.D in economics in order for it to work in your favor.

Short Sale vs. Foreclosure–Which One is The Better Option for a Potential Buyer?

When buying a property, you should know the pros and the cons of short sale versus foreclosure. You also need to know the risks involved in hasty sales. Here are the difference between the two:
1. In a short sale, the house owner/borrower will immediately vacate the property the moment the sale is closed. This is so because he is the one selling his property. With foreclosure on the other hand, it is not un-common for home owners to illegally occupy their homes after it has been foreclosed. Meaning that if you buy a foreclosed property, you could end up dealing with stubborn occupants who would not give you the keys to their doors and leave the property unless the long arm of the law intervenes.
2. With a short sale, you can save a lot of money because the property is mostly sold for less than the outstanding balance of the mortgage. In a foreclosure on the other hand, the price is dependent upon the bidding on the foreclosure auction. Another thing that you have to beware of is that most people whose homes had been foreclosed will leave it in a damaged condition. This means that what would appear to be a good deal may not entirely be so because you will still have to spend a considerable amount to repair the property you’ve purchased and this will offset all the  benefits.
3. Due to the many rules and restrictions involved in foreclosure auctions, to bid can become tricky. In addendum, these rules can vary from state to state adding more complications to the already complicated process. A a rule of the thumb, winning bidders are required to pay for the property within two days, a requirement that is difficult to comply for most prospective buyers. Added to that, if your credit  rating is less than optimal, it will be hard for you to look for a lender who will finance the purchase of the house in auction. The likelihood however, of being able to find a lender who will finance a home purchased through a short sale is greater.
Knowing the pros and cons of purchasing either a short sale or foreclosed property is very important whether you are a home buyer or an investor. This will give you the ability to decide appropriately.

Buying a Short Sale–What are the Advantages?

If you are a buyer of real estate both for a first home and for profit, there are so many advantages in buying a property on short sale. You have to remember that both lender and borrower are trying to avoid foreclosure and this could play to your advantage. Here are a few more things that you need to know before you buy a short sale:
1. Properties on short sale are on pre-foreclosure. It is only a matter of time before these properties will be foreclosed and both lender and borrower are trying to avoid it from happening because of its devastating effects. On the part of the borrower, a foreclosure can have a devastating effect on their credit scores and some may even declare bankruptcy.
On the part of the lender, a foreclosed property may sit un-occupied for many months. Foreclosure proceedings are also costly because it takes too long to finish. This is especially true if the lender doesn’t have an in-house attorney like Jeff Watson or group of attorneys that deal with foreclosures. This can mean that they need outside help which, needless to say, is costly.
So in order to avoid too much hassle for both parties, they would rather resort to short sale rather than wait for the inevitable foreclosure.
2. There are two ways to sell a property on short sale. First, the lender may do it himself and advertise it on newspapers, fliers or their company’s website. When you are dealing with a lender, since you already know that it is  short sale, you can use what you already know to bargain for a lower price.
Second, the selling of the property may go through a real estate agent or a certified Realtor. In this case, you will have a tougher time telling if what you are offered is a short sale because he could be selling many different properties.
3. In order to know whether a lender or a real estate agent is selling a short sale property is to ask right away. You will know right away if the property is on short sale if the price is lower than its appraised value.
4. The main advantage of buying a short sale is that you have the bargaining power. You know that the seller would rather sell the property at a lower price than risk foreclosure, therefore, capitalize on this leverage and bargain for a much lower price.
5. If you have the money to pay upfront, you increase your bargaining power all the more. Although it is not part of the requirements, an upfront will speed up the sale because this will entice the lender to give you the property.
These are some of the advantages of buying a property on short sale. It will not hurt to try to bargain for a lower price knowing that you have the upper hand so, do it. If you need more ideas, try to learn from Tom Butler, a short sale training speaker and investor who has been successful in this area.

Real Estate Short Sale–The Most Common Mistakes Sellers Make

If you are a home owner with mortgage problems, a short sale may be your most viable option to get out of a foreclosure but, there are a lot of mistakes that people make when short selling their property. Here are some of the classic mistakes and what you can do to avoid them:
1. The price is way too low
Just because you are facing a possible foreclosure doesn’t mean that you should sell your property too low. Although short selling a property means selling it below its market value, it doesn’t means that you should sell it a price that would be next to giving it away. If the price of your property is too low, you will definitely have problems making the mortgage lender agree to your terms. Remember that short selling is always a raise against the timeline of foreclosure and the mortgage lender will have to agree to your term before it can go through. So make sure that your offer is reasonable before you run out of time.
2. Lack of marketing effort
Just because you are short selling your property doesn’t mean that the buyers will just come as if by magic. In reality, you actually need to advertise by making postcard or postcards and let the word out otherwise you will run out of time. Avoiding the marketing campaign will surely result in not being able to sell your property on time.
3. Inflexibility with potential buyers
Not being flexible with potential buyers is the worst thing that you can do when short selling your property. If you want to sell your house before the time of foreclosure comes, you should be as accommodating and flexible to potential buyers as possible even if it would means being available on nights and weekends for somebody wants to see the property.
4. The property is not ready for the sale
In order to increase the salability of a property, make sure that it is in a decent condition when you sell it. This might mean putting in extra cash for repainting, carpet replacement and repairs. This can also mean a little manicuring of the lawn to make it look appealing. If you fail to act soon and beautify your property, chances are potential buyers will be discourage. Again, this leads to not being able to sell the property before your time is over.
If you are still living in the house that you are short selling, make sure that you keep it clean because you wouldn’t know if a prospective buyer would suddenly show up. Remember that a dirty home is not something that a potential buyer will love to see.

Bank of America Short Sale–How Do They Do It?

Beginning in 2005 and lasting into 2009 Bank of America (BOA) short sale has been blacklisted from the real estate specialists and agents’ listings. This is a well deserved reputation considering the horror stories that agents reported to the media about transactions with the Bank of America. Some of these stories involved bank documents and other forms getting lost for no reasons, files abruptly closed for no reasons and sometimes they just refuse to respond to phone calls requesting for updates. Added to that, it would usually take ages before a short sale gets approved.
When Equator(www.equator.com) – a company offering default servicing solutions – came into the picture in 2009 or 2010, much of the problems went away and Bank of America was able to turn their reputations around. Today, most agents, Realtors and other professionals are happy again to list any Bank of America short sale because of their fast approval system (30 to 60 days), one that you cannot find in the old days.
If you are a real estate specialist, bear in mind that FHA or VA loans and HAFA short sale programs are disqualified from the Bank of America short sale program. There are some documents that are required in order to qualify for Bank of America short sale like; bank statement, Bank of America short sale packages, tax returns, payroll stubs, W2s, third party authorization, and hardship letter. After you have determined that the property does not fall among those that are disqualified and you now have the necessary documents, you can then apply for a short sale.
As far as the Bank of America is concerned, the agents are very important considering that they are the experts in the short sale process and that is why they have certain duties to perform. You need to list the short sale in Multiple Listing Services(MLS) and give expert advice and tips to the seller regarding what he needs to do. You also need to help with the negotiation process between the seller and the buyer or his agent. Next, you need to obtain a pre-approval letter in order to qualify the buyer. You are also in-charge of writing the contract for the short sale. Since all short sale transactions with Bank of America are handled by Equator, you need to create an account in their website and complete all task that they require. Lastly, you need to submit documents like listing agreements and estimated HUD settlement which will be created by an escrow officer before closing the deal.
Although each investors have different guidelines, there are certain fees that are excluded in the Bank of America short sale. For example, home warranties, past due HOA, repairs and pest works are generally not paid by the Bank of America. Things like excess settlements, notarial fees, document preparations, recording and courier are also not paid. You need to check the guidelines of your investor in order to be sure.
If you are a seller, you have a different set of duties. In order to upload information, you need to use the Bank of America homeowner portal(https://shortsale.bankofamerica.com/). Here you can create an account, upload the requested documents, supply hardship letters and submit all financial info.
Since Equator came into the picture, the Bank of America short sale policy has become as straightforward as you want it to be. They will get all needed information from the seller and the listing agent. Then negotiators will be assigned by the bank who will facilitate the negotiations. He will then contact the agent so that the “broker price opinion” (BPO) will be completed. Then he will review all documents and see if there are some pieces that are missing, then he will inform the agent and send the files to the investor. Then he will issue a counter offer and accept or reject the short sale. Whatever is the outcome all agents and Realtors will then be notified.

These are all the information that you need regarding process involved in real estate short sale, its advantages against foreclosures and how Bank of America does it.

3 Crucial Steps To Get Your Chase Loan Modification Approved

My desk, while writing a paper

Applying for a loan modification can be frustrating especially if you do not have a clear picture of what to do. So if you are about to seek a Chase loan modification, read the following steps required by the lender and be guided. But remember, simply following these steps are not enough. You must satisfy their eligibility requirements.

Who Will Facilitate Your Chase Loan Modification Application?

You can apply for your loan to be modified yourself, but you may also seek the help of a loan modification company or through a representative of the Federal House Administration. If you opt to have a company process your application for you, you have to prepare to pay their fees. But if you decide to handle your loan modification yourself, the following steps recommended by Chase are essential to help you get underway.

Steps When Applying For Chase Loan Modification

1. Get in touch with the lender through their Loan Modification Department at 866-550-5705. Before you dial these numbers, make sure that you have kept your home loan number handy. Jot down any questions that you want to ask for a smooth phone conversation and so that you do not forget them. This phone conversation could take long and expect the representative to ask about your financial difficulty and may ask you reasons for why you are having a hard time paying for your monthly mortgage dues.

2. Gather the required documents:

Hardship letter explaining your financial circumstances that led to your difficulty in making your monthly mortgage dues.

Signed and accomplished statement summarizing your monthly budget

If you are employed:

2 latest pay stubs

If you are self-employed:

Bank statements of the last 4 months

Latest tax papers

3. Accomplish application form and send application package to Chase. Once you have done the previous actions, expect to receive a Chase loan modification application package. Accomplish the application form, attach the required documents as stated in the package and send them to Chase.

What Does Your Lender Look For In Your Chase Loan Modification Application

Needless to say, Chase would like to see all the documents they require to be in your application. They will study these documents to find out the kind of financial hardship that you are in and if it is permanent. That is why, if they will spot an expense on a luxurious car in the monthly budget you submitted, expect to get a “No”. Also pay particular attention when writing your hardship letter. Cite a job loss, an illness, a divorce, or other circumstances that have made a big unfavorable impact on your finances, making you unable to pay your monthly mortgage dues. Including the rate you would want to be paying in your letter would also be helpful. Work this out based on the planned monthly budget you submitted.

When you have sent the application package, expect to wait for as long as eight weeks before you would hear advice of whether or not your request has been approved.

Preparing a Chase loan modification request is simplified if you know what to do and what are required; and a complete application increases your chances of getting approved.

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Loan Modification Scams Dressed Up As Loan Modification Services

Loan Modification Services

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Circumspection In Choosing From Among Loan Modification Services

Generally, there are two types of loan modification companies: the legit and the scam. There are also two general types of consumers: the canny and the gullible. How you choose the firm that will help you re-work your loan will mainly tell what type of consumer you are. Get to know how these scams are pulled off by con artists to avoid being double-crossed by loan modification services that are actually scams.

Cracking Scams Cloaked As Loan Modification Services

Pseudo-Foreclosure Consultants. Be wary when dealing with some people who call themselves as foreclosure consultants but are actually charlatans, purveying ostensible services and programs to help financially distressed homeowners avoid foreclosure, but are in reality no more than tricks to bilk you of your limited funds. These snake oil salesmen usually lurk in the Internet waiting for their unsuspecting prey to voluntarily come to them. Homeowners seeking loan modification services are often easy targets. They operate simply by exacting substantial amount from their victims to cover for their services. However, after the agreement has been signed and the payment pocketed, the agency virtually does nothing, or worse suddenly disappears. As a result, you lose your home. Naturally, these swindlers have no plans of reimbursing you if your house gets auctioned. Complaints about these schemes swarm the State Attorney General’s office.

Unaffordable Modification Program. Another way con artists maneuver their tricks is by collecting money from the homeowner upon signing up, then registering the homeowner to a loan modification plan that he cannot afford, even if there is a big possibility that they can negotiate with the lender for a better agreement. These scheming companies make easy money by declaring that their job is done once they have gotten and presented the easiest modification available to the homeowner. Sadly, signing up for an unaffordable plan will not get you anywhere except even farther from your home.

Expensive Loan Modification Seminars Which Can Cost You Your Home. One more variation of the fraud is by plainly exacting exorbitant fees for loan modification seminars where homeowners are required to attend. These seminars are said to help in bargaining for more beneficial loan terms. If you do not attend such events, the scheming company will not do anything to help you save your home, and will even hold you responsible for losing your property.

Loan Audits. Some shady companies will also charge your for loan audits that are conducted by someone who is not even a qualified lawyer. Oftentimes, these audits are done and paid for in vain since the petitions that the homeowners are prompted to obtain are hindered by the expiration of the ruling of limitations for that certain case. You end up paying thousands of dollars just to be informed of what is ineffective in salvaging your home.

Alas, a lot of financially saddled homeowners are beguiled into signing up for these scams due to a lack of knowledge. They are thick on the ground, that is why, the different states are having a hard time in taking legal action and closing down these organizations. Hence, get to know a company offering loan modification services first, before signing up so that you do not add up to the statistics of victims.

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Top 4 Reasons Why Your Citimortgage Loan Modification Request May Be Denied

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Know Your Chances Of Getting A Citimortgage Loan Modification

With the economic slump, paying for mortgage has become a struggle to many homeowners. That is why, a lot of them negotiate with their lenders to restructure their loan. Some get approved, while others are denied. Lenders reject proposals to rework terms due to a number of reasons. If you are considering seeking a Citimortgage loan modification, study these reasons so that you can gauge you chances of getting an approval.

Causes Behind Citimortgage Loan Modification Thumbs Down

Up-To-Date Payments. Paying regularly your monthly mortgage dues gives your lender the impression that you are not experiencing financial hardship. If you are not behind on your payments, chances are, your proposal for a loan adjustment may just get rejected. But do not get it wrong. It may be a bad idea to deliberately default on your payments just to be able to qualify for a Citimortgage loan modification. Doing so will mar your credit standing and risk your house to foreclosure. Refinancing may be a better option for you. With your good credit score, you may be able to avail of lower interest rate from a new loan.

Home Valued Is Greater Than Loan Amount. For your lender, this means that should they foreclose on your house, they can still resell it at a relatively good price. That is why, even if you submit enough documented proof that you lost your job or incurred losses in your business for some time, Citimortgage may decline your proposal.

Incomplete Requirements. A lot of Citimortgage loan modification requests go down the rejection bin because a certain financial document is missing, or you forgot to sign a particular document. So make sure that all the paperwork is there and all dotted lines are inked. Remember to prepare your pay stubs of the last two months, W2/tax return or year-end business statement (if you have a business) of the previous years, and personal bank statements for the last six months.

Unconvincing Hardship Letter. Your hardship letter should contain enough drama to melt hearts. Although lenders may appear unsympathetic, remember that they are human too. Concisely explain in your letter your why you could no longer afford your mortgage dues. State what financial jam led you to default. Also, if your house is in an area where foreclosures are rampant and values of houses are tailing off, highlight that in your letter.

To better your chances of obtaining a Citimortgage loan modification, understand where Citimortgage is coming from. Although they may want to help their mortgagors, the lender’s interest is foremost in their decision of whether or not to approve a request for loan readjustment.

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Warning: Do Not Ignore These Loan Modification Red Flags

Loan Modification Scams

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Tough times call for tough measures. With the bleak economy and the wave of foreclosures, scoundrels will take advantage of people who are desperate or who lack the knowledge on how to handle their situation. Many of these rip-offs make money through loan modification scams. So if you are facing foreclosure, beware of people who offer too good to be true promises. It is a red flag of dishonesty.

You may have seen them on TV, the papers or radio and from the Internet through ads that promise you that they can absolutely rework your loan to make it more affordable. Some may have even discovered some means to get in touch with you and you are considering to take their offer. Before you sign up for anything or pay any upfront fees, consider these eight indicators of loan modification scams.

Loan Modification Scams Demand for Upfront Fees

From this alone, they are already breaking the law since foreclosure consultants and loan modification companies are prohibited from collecting any payments prior to delivery of their services.

Loan Modification Scams Will Ask You to Transfer Ownership of the House to their Firm

Common sense ought to make you think twice or even a hundred times about this request. Why should you agree to transfer the title of the property to them? It is akin to handing over your handbag to a robber without the robber pointing a gun at you. Do not be beguiled by their assurance that you will be able to repurchase or lease it.

Loan Modification Scams Will Advice You to Disregard Letters From Your Lenders

If there is one thing that you should be doing, it is to read the correspondence from lenders, get in touch with them, explain your hardship and try to negotiate for better terms.

Loan Modification Scams Will Ask You to Make Mortgage Payments to Their Company Instead of to Your Lender

Beware, you may find yourself in deeper trouble upon finding out that the payments you have sent to the so-called loan modification company did not make its way to your lenders. So if you are sending payments to your loan modification service provider, make sure that they disburse the payments to your lenders.

Loan Modification Scams Will Pressure You To Ink Documents Even If You Have Not Read Them Yet

When they use this ploy, they make you think that by signing these official documents, it is for your benefit. Unwittingly, you are, in fact, transferring ownership of your property to them. Do not fall victim to this flagrant act.

Loan Modification Scams Will Advice You Not To Take Counsel From An Attorney or Government-Approved Counselors

This is definitely a glaring red flag. What is wrong with consulting a lawyer or other counselors? When they do this, it is obvious that something is fishy. Consulting a lawyer or a government-approved counselor is what you may just need.

Loan Modification Scams Assure You of a Sure-Fire Loan Modification

If you have not yet discussed your situation with them, there is no way for them to determine whether or not you can get a loan modification, they cannot so much as tell whether or not a loan modification is right for you.

Loan modification scams are there for your money and nothing else, so before signing up for a loan modification service provider that you are not so familiar with, consider doing your research first about the company or better yet to learn about the process and try doing the tasks yourself in obtaining a loan modification.

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The Snags In Buying A Short Sale

Semi-detached houses in Croydon for sale

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The Price For Buying A Short Sale

Several people consider buying a short sale, be it as a primary home or as an investment, to take advantage of the typical rock-bottom pricing. Although you can potentially bring in big savings, a short sale can exact from you, among other things, your time and patience. The home you are eyeing to buy can become the rope in a tug-of-war involving more than two tugging rivals: you (the  buyer), the bank (the lender), the seller (the homeowner) and the other buyers. However, if you still would want to try to purchase a home offered on short sale, stock your medicine cabinet with some aspirin as you may suffer some bouts of headache.

Headaches in Buying A Short Sale

Protracted Process. Short sales are notorious for their proneness to drag out. The lenders play a big role in this waiting game. First, banks must acquiesce in suffering a loss on the property before the process can get underway. Second, there must already be an offer from a prospective buyer submitted to the bank for the short sale to be considered in progress. A single offer is often not enough, banks will bide their time to wait for more enticing offers. If you are the first buyer to name your price, sit back, relax, grab some chips dashed with powdered patience as the lender keeps you in suspense for weeks or months before they can reply to your offer.

Thumbs Down To Your Offer. As the lender takes their sweet time sitting on their hands, more offers to buy the short sale are tendered while the property stays active on real estate and MLS listings. Chances are, the lender will be presented with a higher offer and settle on that one. This means that the weeks or months of waiting do not assure you of a positive reply for your initial offer.

Price War. Buying a short sale is not as easy as many think. It even may not be as cheap as most people expect. Yes, many are sold below market price. However, there are properties that actually sell more than their market value because of price wars as a result of banks waiting for more offers. This pushes the price up, sometimes higher than the market price.

As Is Condition. When buying a short sale, you can inspect the property. However, you have to know that the lender may ask you to ink an As-Is Addendum. When you have signed this, it means that you as the buyer, accept the home in its current state and the lender is free from the liabilities for any damages. So better make your inspection thorough to discover potential problems early on and factor it in when making an offer.

Do not be caught short when buying a short sale; know what to expect so that you can prepare for the drawn-out process, the possibility of a negative reply after months of waiting, and the price war, and be on the lookout for possible damages to the property that become your responsibility once you have bought it.

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How To Clinch A Countrywide Short Sale

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The Automation of Countrywide Short Sale Under Bank of America

If you would like to negotiate a Countrywide short sale, then you will have to file this request with the Bank of America. This is because BoA acquired Countrywide in 2008. You have to know that filing for a short sale with BoA goes through the online Equator system, that is, if your mortgage is not backed by the Federal Housing Adminsitration or Veterans Affairs. This online system is highly automated with the listing agent punching in the necessary information. A more streamlined and expedited process is hoped to be obtained through this system. So what steps must you undertake to start the short sale ball rolling?

Steps In Doing A Countrywide Short Sale

1. Find a realtor and buyer for your house. Having a buyer is a requisite for you to get your Countrywide short sale underway. You can actually find a buyer yourself but it may also be better if you have it catalogued with a realtor since BoA requires that buyers and other parties be represented by real estate agents. Additionally, the Equator system has been designed for real estate agents acting for the homeowners and could be intricate for an ordinary borrower to be working by himself. When looking for a realtor, put much weight on his experience doing Countrywide short sales. Make sure that this experience includes several successes, otherwise you may just be wasting your limited resources on nothing.

2. Furnish your realtor with your necessary financial details so that he can key them into the online system. Include data that can substantiate your financial hardship as these will be used by the mortgage provider to assess that you indeed cannot afford to continue the payments.

3. Inform BoA regarding offers on the house by having your realtor input them into the system.

4. Expect your mortgage provider to have your home appraised or valued by a Broker’s Price Opinion or BPO.

5. Based on the appraisals, the BoA will decide whether to accept the offer of a buyer or make a counteroffer. Once the parties agree on the final price, the bank will send an endorsement for the short sale and the offer can be received to close the transaction.

Filing a Countrywide short sale now goes through the online Equator system since this mortgage provider is now under the Bank of America. Working with a real estate agent may be what’s best for a homeowner, since the system is designed especially for agents.

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Must-Know Short Sale Information

Short Sale Information

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Short sale has been conceived as a less painful alternative to foreclosure. Financially distressed homeowners facing foreclosure are often advised to look to short sale as a better way to lose a home and to protect credit score. In this post, we look at some short vital sale information particularly on how “protective” a short sale is on the homeowner’s credit and what makes it a better way to lose a home.

Shorts Sale Information: You Need To Find A New Home ASAP After Short Sale

They say that a short sale is the preferable way of giving up a home over foreclosure. But have you considered the fact that if you take this route of giving up your home, you need to immediately find a new place to live in once your home has been short sold? Additionally, you have to bear with the inconvenience of allowing potential buyers to view the property or you even have to put up with agents conducting open houses to attract buyers. Whereas in foreclosure, it is possible (depends on which state you are in) for you to stay in your home (with no rent) for four months to a year before they can compel you to abandon your foreclosed home. By saying this, I do not necessarily mean that you go for a foreclosure.

Shorts Sale Information: Effect on Credit Score

Now let’s go to the next reason why a short sale is preferable over the dreaded F: effect on credit rating. Actually, the difference in the credit ramifications of the two on credit record is not gaping. A short sale will often appear on your record as ‘pre-foreclosure in redemption’, ‘settlement’ or ‘settlement for less than owed’. You also have to realize that if your lender allows a short sale, most likely, your credit record already would have reflected a little blemish since you have to be delinquent on your payments for your application for short sale to be approved. You would not want these logs to be in your credit record, but with a short sale, expect a decline in your credit score by 80 to 100 points. But do not worry because they can possibly be taken off your file in a few years or less. You can also possibly negotiate with your lender and ask not to report the short sale to the credit agencies.

In comparison, your FICO score may go down by a whopping 200 to 280 points with a foreclosure. This unfortunate way of losing your house will also be reflected on your credit record for as long as 7 to 10 years. In this aspect, a short sale is definitely the lesser evil.

Short Sale Information: You May Be Obliged To Pay For Deficiency Balance

There is a way to keep your credit rating intact. This is by paying for the deficiency balance left after short selling, the deficit between the mortgage balance and the selling price. However, if you cannot settle this, your credit record may have to brace for another blow as your lender can file a judgment in an effort to collect the full or a portion of the deficit. This will be logged on your record and may possibly pull down your rating even lower. This record will stay on your credit record for seven years. Having this in your file may give you a hard time getting the credit approval of other creditors.

Before going for a short sale, gather all the short sale information you can get to aid you in weighing your options and help you prepare for what to expect.

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The Secret Formula To Writing A Short Sale Hardship Letter

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Like writing a love letter, writing the short sale hardship letter is crucial in wooing your lender to allow you to sell your house as a short sale. Financial statements and pay stubs flatly show how much you make and how much you spend. The hardship letter tells bankers how your financial situation affect you personally. That is why, lenders give this letter weight in their decision in allowing a short sale. If this is so, you may wonder, what must you include in a hardship letter. Here are the things you must consider.

The Recipients of Your Short Sale Hardship Letter

When writing your short sale hardship letter, put yourself in the bankers’ shoes. Although most of you may think that bankers have no emotions, keep in mind that an actual human being will be reading your letter. Show courtesy and appeal to their emotions. Another thing you must remember is that bankers are often swamped with the same letters from other homeowners. Although we encourage you to compellingly and descriptively explain your story, do not write a novel. Your one-page letter should recount reasons, dates and situations explaining your predicament.

What Must You Include in A Short Sale Hardship Letter

Reasons Why You Can No Longer Afford Your Payments. Think about what events have pushed you into this tight spot and led you to default on your payments. Did you go through a divorce, suffer a medical condition, lose a job or did someone die in the family? Be honest and do not make up stories. Specify dates of when the unfortunate event happened and the series of events that led to it including the times when you failed to make payments.

Actions You Took To Handle The Situation. Show your lenders that you made effort in handling the problem. Maybe you sold some things at home or you waited on tables or took an extra job to raise money to pay for mortgage.

Bad Circumstances In Your Neighborhood Affecting The Value Of Your House. Include certain unfortunate events in your specific neighborhood that you may know of, such as a spate of foreclosures in your street, decline in values of properties or increase in taxes in your area.

Permanent Circumstances That Led To Hardship. State in your short sale hardship letter whether or not the difficulties you are facing are permanent. Permanent situations, such as cases of death, divorce or serious illness may bear more weight. Temporary circumstances such as being unemployed can still be improved, hence, short selling your house may not be the best recourse. A loan modification may be recommended.

How a short sale hardship letter is written can make or break your request to short sell your home. Look at it with bankers’ eyes: make it concise but compelling enough to appeal to their emotions.

How To Buy A Short Sale Home

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Buying A Short Sale Home: Is It Worth It?

Want to buy a new home for less? Some home buyers and real estate investors look to buying short sale homes. You can acquire a property for as low as 40 percent of its original worth. These crazy prices make buying a short sale home worth it, that is, if the lender gives the thumbs up.

A short sale can be trying not just to the seller but to you, the buyer, as well. It can turn into a waiting game if the creditor is reluctant in allowing the process and in shouldering the losses. Be prepared to wait for months to complete your purchase. If you are pressed for time though, you can find bargains from foreclosures and some upper-fixers.

How To Get The Lender To Approve A Short Sale Home?

You practically cannot influence the lender to approve a short sale except by offering a considerable bid price. One important reason that the lender will deny a short sale or turn down your offer is if they are not happy with the bids submitted and think that they can make more money by foreclosing on the house. Typically, lenders will request one or more appraisals and may also ask for a Broker’s Price Opinion. A comparative market analysis may be needed to defend the price offer. However, offering too much just to get the lender’s approval could defeat your purpose of buying a short sale: get a great bargain. If you have the wherewithal, find out if the particular lender you are dealing with would put weight to substantial down payments, then offer to pay a considerable amount or even in cash if they are swayed by this.

Although you have no control over the other matters, you should at least know what will make the thumbs of the lender go up so that at least you would have some idea of your chances of buying the short sale home. The mortgage provider must be convinced by the financial difficulty of the seller through the hardship letter. If the lender has funded a number of properties currently in the throes of foreclosure, a short sale may be approved to reduce the number of foreclosures. The lender will also check the Disbursement Estimate to check if the seller has received money.

5 Steps In Buying A Short Sale Home

1. Research before you submit an offer to purchase. To guide you in coming up with an appropriate price, ask questions such as: who is in title; how much is the mortgage balance; has a foreclosure notice been file already. It is also important that you know if there is a second mortgage as this can also affect whether a short sale can proceed. Ask also if you can reserve the right to inspection. Most short sale homes are sold on an as-is basis, which means that you are not protected. Protect yourself by checking out the property.

2. Hire a competent real estate agent with solid experience in short sales. Your agent can help you with the research above and in contacting and coordinating with the lender.

3.Get in touch with the loss mitigation department of the mortgage provider and furnish and Authorization Release Information form signed by the seller. You will know about your chances of buying the property from this department so take note of names and numbers to make your follow up.

4. Submit your offer, the required documentation and a copy of your earnest money deposit. If you qualified for a pre approved loan, also submit a proof of this.

5. Wait. In the first few months after you proffered your bid, expect that even if you made the highest bid, the bank may not consent a short sale. They would buy time waiting for a higher offer. This delaying tactic is what stretches the short sale process to take several months or even over a year.

Buying a short sale home can be profitable to real estate investors and budget-friendly to home buyers; however, the strung-out process can discourage would-be buyers to pursue the purchase.

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9 Critical Reasons Why You Must Avoid Short Sale Homes

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Are you one of those people scouting for listings of short sale homes, hoping to buy property at a bargain price, either for personal use or as an investment? Although some people may have been lucky to chance on some great steals, there are a number of reasons why you must avoid short sale homes.

1. Sellers of Short Sale Homes Borrowed More Than They Should Have

During periods when the market was escalating, many lenders were motivated to lend money to the extent of lending borrowers more than the real value of the home. Subjective appraisals did not help to prevent this. There were some banks that allegedly, pushed appraisers to give an appraisal equivalent to the amount that the homeowners want to borrow.

2. Seller Bought Expensively

Many short sale homes, before they got under water, were originally bought at a time that the market was leaping, hence, the homeowners bought them at relatively expensive prices. However, now that the market has taken a nosedive, the homeowners no longer have equity. So when you buy a short sale, it does not really mean that you are enjoying a great discount that really is not there. For example, if the short sale home you are considering to buy was originally acquired some years ago by the homeowner for $300,000, and now it is offered at $200,000. Do not think that you are luckily fetching $100,000 of equity at no cost.

3. Short Sale Homes That Are Ineligible

Beware of homes listed as short sales even if homeowners have not discussed short selling with their lenders yet or have not yet gone through pre-qualifying assessment yet. Some unprofessional real estate agents urge homeowners to contemplate on short selling their house even if the seller is not qualified.

4. A Waiting Game

Processing short sales could take between two weeks to several months before you can close the transaction. Some factors that contribute to the sluggish process include incomplete paperwork submitted by the seller and the logjam of foreclosures faced by the lender. Additionally, lenders also take their sweet time waiting for higher bids if they do not like the current prices being offered. If there are two loans secured to the property, then you will be dealing with two lenders and the process may just protract because you need to satisfy two sets of demands.

5. Not All Short Sale Homes Sell At A Discount

As previously mentioned, lenders often take their time approving a short sale because they are waiting for higher offers. They will budge only when offers are at par with comparative prices in the market. The lender would prefer to foreclose on a house if he thinks that he can get a better price there than in short sale, so he delays approving a short sale request, waiting for a higher offer. In effect, short sale homes are sold at market value or at least close to market value.

6. “As Is” Selling Condition

If you buy short sale homes, typically, you are to buy them at their present condition. Banks will most likely not pay for your home protection plan, roof repairs or roof certifications, proposed repairs reported on a home inspection, pest inspections or work needed to furnish a clear pest report, and deferred maintenance.

7. Changing Conditions of Lenders

Do you have lawyers at your disposal? Watch out for lenders who reserve the right to change the conditions of the short sale at the last minute. There are lenders who do this depending on shifts in the market, enactment of new laws or some new information gathered. Lenders can make this renegotiation at their whim because they have lawyers at their disposal.

8. Steep Closing Costs for Buyers

Most lenders do not pay for any additional costs. In some cases, they even will not pay for transfer taxes and other customary seller closing costs. You will have to pay for any extras you want, such as if you would like to conduct particular inspections.

9. Lender Often Controls The Transaction

The lender of the seller is in control in a short sale. The closing process in a short sale can last for an unknown length of time. This disables you from being able to target a specific date to close escrow.

At first glance, buying short sale homes may be a great way to acquire great deals; but knowing the nitty-gritty of the transaction may turn buyers’ feet cold.

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3 Crucial Steps To Get Your Chase Loan Modification Approved

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Applying for a loan modification can be frustrating especially if you do not have a clear picture of what to do. So if you are about to seek a Chase loan modification, read the following steps required by the lender and be guided. But remember, simply following these steps are not enough. You must satisfy their eligibility requirements.

Who Will Facilitate Your Chase Loan Modification Application?

You can apply for your loan to be modified yourself, but you may also seek the help of a loan modification company or through a representative of the Federal House Administration. If you opt to have a company process your application for you, you have to prepare to pay their fees. But if you decide to handle your loan modification yourself, the following steps recommended by Chase are essential to help you get underway.

Steps When Applying For Chase Loan Modification

1. Get in touch with the lender through their Loan Modification Department at 866-550-5705. Before you dial these numbers, make sure that you have kept your home loan number handy. Jot down any questions that you want to ask for a smooth phone conversation and so that you do not forget them. This phone conversation could take long and expect the representative to ask about your financial difficulty and may ask you reasons for why you are having a hard time paying for your monthly mortgage dues.

2. Gather the required documents:

Hardship letter explaining your financial circumstances that led to your difficulty in making your monthly mortgage dues.

Signed and accomplished statement summarizing your monthly budget

If you are employed:

2 latest pay stubs

If you are self-employed:

Bank statements of the last 4 months

Latest tax papers

3. Accomplish application form and send application package to Chase. Once you have done the previous actions, expect to receive a Chase loan modification application package. Accomplish the application form, attach the required documents as stated in the package and send them to Chase.

What Does Your Lender Look For In Your Chase Loan Modification Application

Needless to say, Chase would like to see all the documents they require to be in your application. They will study these documents to find out the kind of financial hardship that you are in and if it is permanent. That is why, if they will spot an expense on a luxurious car in the monthly budget you submitted, expect to get a “No”. Also pay particular attention when writing your hardship letter. Cite a job loss, an illness, a divorce, or other circumstances that have made a big unfavorable impact on your finances, making you unable to pay your monthly mortgage dues. Including the rate you would want to be paying in your letter would also be helpful. Work this out based on the planned monthly budget you submitted.

When you have sent the application package, expect to wait for as long as eight weeks before you would hear advice of whether or not your request has been approved.

Preparing a Chase loan modification request is simplified if you know what to do and what are required; and a complete application increases your chances of getting approved.

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Loan Modification Scams Dressed Up As Loan Modification Services

Loan Modification Services

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Circumspection In Choosing From Among Loan Modification Services

Generally, there are two types of loan modification companies: the legit and the scam. There are also two general types of consumers: the canny and the gullible. How you choose the firm that will help you re-work your loan will mainly tell what type of consumer you are. Get to know how these scams are pulled off by con artists to avoid being double-crossed by loan modification services that are actually scams.

Cracking Scams Cloaked As Loan Modification Services

Pseudo-Foreclosure Consultants. Be wary when dealing with some people who call themselves as foreclosure consultants but are actually charlatans, purveying ostensible services and programs to help financially distressed homeowners avoid foreclosure, but are in reality no more than tricks to bilk you of your limited funds. These snake oil salesmen usually lurk in the Internet waiting for their unsuspecting prey to voluntarily come to them. Homeowners seeking loan modification services are often easy targets. They operate simply by exacting substantial amount from their victims to cover for their services. However, after the agreement has been signed and the payment pocketed, the agency virtually does nothing, or worse suddenly disappears. As a result, you lose your home. Naturally, these swindlers have no plans of reimbursing you if your house gets auctioned. Complaints about these schemes swarm the State Attorney General’s office.

Unaffordable Modification Program. Another way con artists maneuver their tricks is by collecting money from the homeowner upon signing up, then registering the homeowner to a loan modification plan that he cannot afford, even if there is a big possibility that they can negotiate with the lender for a better agreement. These scheming companies make easy money by declaring that their job is done once they have gotten and presented the easiest modification available to the homeowner. Sadly, signing up for an unaffordable plan will not get you anywhere except even farther from your home.

Expensive Loan Modification Seminars Which Can Cost You Your Home. One more variation of the fraud is by plainly exacting exorbitant fees for loan modification seminars where homeowners are required to attend. These seminars are said to help in bargaining for more beneficial loan terms. If you do not attend such events, the scheming company will not do anything to help you save your home, and will even hold you responsible for losing your property.

Loan Audits. Some shady companies will also charge your for loan audits that are conducted by someone who is not even a qualified lawyer. Oftentimes, these audits are done and paid for in vain since the petitions that the homeowners are prompted to obtain are hindered by the expiration of the ruling of limitations for that certain case. You end up paying thousands of dollars just to be informed of what is ineffective in salvaging your home.

Alas, a lot of financially saddled homeowners are beguiled into signing up for these scams due to a lack of knowledge. They are thick on the ground, that is why, the different states are having a hard time in taking legal action and closing down these organizations. Hence, get to know a company offering loan modification services first, before signing up so that you do not add up to the statistics of victims.

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Top 4 Reasons Why Your Citimortgage Loan Modification Request May Be Denied

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Know Your Chances Of Getting A Citimortgage Loan Modification

With the economic slump, paying for mortgage has become a struggle to many homeowners. That is why, a lot of them negotiate with their lenders to restructure their loan. Some get approved, while others are denied. Lenders reject proposals to rework terms due to a number of reasons. If you are considering seeking a Citimortgage loan modification, study these reasons so that you can gauge you chances of getting an approval.

Causes Behind Citimortgage Loan Modification Thumbs Down

Up-To-Date Payments. Paying regularly your monthly mortgage dues gives your lender the impression that you are not experiencing financial hardship. If you are not behind on your payments, chances are, your proposal for a loan adjustment may just get rejected. But do not get it wrong. It may be a bad idea to deliberately default on your payments just to be able to qualify for a Citimortgage loan modification. Doing so will mar your credit standing and risk your house to foreclosure. Refinancing may be a better option for you. With your good credit score, you may be able to avail of lower interest rate from a new loan.

Home Valued Is Greater Than Loan Amount. For your lender, this means that should they foreclose on your house, they can still resell it at a relatively good price. That is why, even if you submit enough documented proof that you lost your job or incurred losses in your business for some time, Citimortgage may decline your proposal.

Incomplete Requirements. A lot of Citimortgage loan modification requests go down the rejection bin because a certain financial document is missing, or you forgot to sign a particular document. So make sure that all the paperwork is there and all dotted lines are inked. Remember to prepare your pay stubs of the last two months, W2/tax return or year-end business statement (if you have a business) of the previous years, and personal bank statements for the last six months.

Unconvincing Hardship Letter. Your hardship letter should contain enough drama to melt hearts. Although lenders may appear unsympathetic, remember that they are human too. Concisely explain in your letter your why you could no longer afford your mortgage dues. State what financial jam led you to default. Also, if your house is in an area where foreclosures are rampant and values of houses are tailing off, highlight that in your letter.

To better your chances of obtaining a Citimortgage loan modification, understand where Citimortgage is coming from. Although they may want to help their mortgagors, the lender’s interest is foremost in their decision of whether or not to approve a request for loan readjustment.

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Warning: Do Not Ignore These Loan Modification Red Flags

Loan Modification Scams

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Tough times call for tough measures. With the bleak economy and the wave of foreclosures, scoundrels will take advantage of people who are desperate or who lack the knowledge on how to handle their situation. Many of these rip-offs make money through loan modification scams. So if you are facing foreclosure, beware of people who offer too good to be true promises. It is a red flag of dishonesty.

You may have seen them on TV, the papers or radio and from the Internet through ads that promise you that they can absolutely rework your loan to make it more affordable. Some may have even discovered some means to get in touch with you and you are considering to take their offer. Before you sign up for anything or pay any upfront fees, consider these eight indicators of loan modification scams.

Loan Modification Scams Demand for Upfront Fees

From this alone, they are already breaking the law since foreclosure consultants and loan modification companies are prohibited from collecting any payments prior to delivery of their services.

Loan Modification Scams Will Ask You to Transfer Ownership of the House to their Firm

Common sense ought to make you think twice or even a hundred times about this request. Why should you agree to transfer the title of the property to them? It is akin to handing over your handbag to a robber without the robber pointing a gun at you. Do not be beguiled by their assurance that you will be able to repurchase or lease it.

Loan Modification Scams Will Advice You to Disregard Letters From Your Lenders

If there is one thing that you should be doing, it is to read the correspondence from lenders, get in touch with them, explain your hardship and try to negotiate for better terms.

Loan Modification Scams Will Ask You to Make Mortgage Payments to Their Company Instead of to Your Lender

Beware, you may find yourself in deeper trouble upon finding out that the payments you have sent to the so-called loan modification company did not make its way to your lenders. So if you are sending payments to your loan modification service provider, make sure that they disburse the payments to your lenders.

Loan Modification Scams Will Pressure You To Ink Documents Even If You Have Not Read Them Yet

When they use this ploy, they make you think that by signing these official documents, it is for your benefit. Unwittingly, you are, in fact, transferring ownership of your property to them. Do not fall victim to this flagrant act.

Loan Modification Scams Will Advice You Not To Take Counsel From An Attorney or Government-Approved Counselors

This is definitely a glaring red flag. What is wrong with consulting a lawyer or other counselors? When they do this, it is obvious that something is fishy. Consulting a lawyer or a government-approved counselor is what you may just need.

Loan Modification Scams Assure You of a Sure-Fire Loan Modification

If you have not yet discussed your situation with them, there is no way for them to determine whether or not you can get a loan modification, they cannot so much as tell whether or not a loan modification is right for you.

Loan modification scams are there for your money and nothing else, so before signing up for a loan modification service provider that you are not so familiar with, consider doing your research first about the company or better yet to learn about the process and try doing the tasks yourself in obtaining a loan modification.

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The Snags In Buying A Short Sale

Semi-detached houses in Croydon for sale

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The Price For Buying A Short Sale

Several people consider buying a short sale, be it as a primary home or as an investment, to take advantage of the typical rock-bottom pricing. Although you can potentially bring in big savings, a short sale can exact from you, among other things, your time and patience. The home you are eyeing to buy can become the rope in a tug-of-war involving more than two tugging rivals: you (the  buyer), the bank (the lender), the seller (the homeowner) and the other buyers. However, if you still would want to try to purchase a home offered on short sale, stock your medicine cabinet with some aspirin as you may suffer some bouts of headache.

Headaches in Buying A Short Sale

Protracted Process. Short sales are notorious for their proneness to drag out. The lenders play a big role in this waiting game. First, banks must acquiesce in suffering a loss on the property before the process can get underway. Second, there must already be an offer from a prospective buyer submitted to the bank for the short sale to be considered in progress. A single offer is often not enough, banks will bide their time to wait for more enticing offers. If you are the first buyer to name your price, sit back, relax, grab some chips dashed with powdered patience as the lender keeps you in suspense for weeks or months before they can reply to your offer.

Thumbs Down To Your Offer. As the lender takes their sweet time sitting on their hands, more offers to buy the short sale are tendered while the property stays active on real estate and MLS listings. Chances are, the lender will be presented with a higher offer and settle on that one. This means that the weeks or months of waiting do not assure you of a positive reply for your initial offer.

Price War. Buying a short sale is not as easy as many think. It even may not be as cheap as most people expect. Yes, many are sold below market price. However, there are properties that actually sell more than their market value because of price wars as a result of banks waiting for more offers. This pushes the price up, sometimes higher than the market price.

As Is Condition. When buying a short sale, you can inspect the property. However, you have to know that the lender may ask you to ink an As-Is Addendum. When you have signed this, it means that you as the buyer, accept the home in its current state and the lender is free from the liabilities for any damages. So better make your inspection thorough to discover potential problems early on and factor it in when making an offer.

Do not be caught short when buying a short sale; know what to expect so that you can prepare for the drawn-out process, the possibility of a negative reply after months of waiting, and the price war, and be on the lookout for possible damages to the property that become your responsibility once you have bought it.

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How To Clinch A Countrywide Short Sale

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The Automation of Countrywide Short Sale Under Bank of America

If you would like to negotiate a Countrywide short sale, then you will have to file this request with the Bank of America. This is because BoA acquired Countrywide in 2008. You have to know that filing for a short sale with BoA goes through the online Equator system, that is, if your mortgage is not backed by the Federal Housing Adminsitration or Veterans Affairs. This online system is highly automated with the listing agent punching in the necessary information. A more streamlined and expedited process is hoped to be obtained through this system. So what steps must you undertake to start the short sale ball rolling?

Steps In Doing A Countrywide Short Sale

1. Find a realtor and buyer for your house. Having a buyer is a requisite for you to get your Countrywide short sale underway. You can actually find a buyer yourself but it may also be better if you have it catalogued with a realtor since BoA requires that buyers and other parties be represented by real estate agents. Additionally, the Equator system has been designed for real estate agents acting for the homeowners and could be intricate for an ordinary borrower to be working by himself. When looking for a realtor, put much weight on his experience doing Countrywide short sales. Make sure that this experience includes several successes, otherwise you may just be wasting your limited resources on nothing.

2. Furnish your realtor with your necessary financial details so that he can key them into the online system. Include data that can substantiate your financial hardship as these will be used by the mortgage provider to assess that you indeed cannot afford to continue the payments.

3. Inform BoA regarding offers on the house by having your realtor input them into the system.

4. Expect your mortgage provider to have your home appraised or valued by a Broker’s Price Opinion or BPO.

5. Based on the appraisals, the BoA will decide whether to accept the offer of a buyer or make a counteroffer. Once the parties agree on the final price, the bank will send an endorsement for the short sale and the offer can be received to close the transaction.

Filing a Countrywide short sale now goes through the online Equator system since this mortgage provider is now under the Bank of America. Working with a real estate agent may be what’s best for a homeowner, since the system is designed especially for agents.

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Must-Know Short Sale Information

Short Sale Information

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Short sale has been conceived as a less painful alternative to foreclosure. Financially distressed homeowners facing foreclosure are often advised to look to short sale as a better way to lose a home and to protect credit score. In this post, we look at some short vital sale information particularly on how “protective” a short sale is on the homeowner’s credit and what makes it a better way to lose a home.

Shorts Sale Information: You Need To Find A New Home ASAP After Short Sale

They say that a short sale is the preferable way of giving up a home over foreclosure. But have you considered the fact that if you take this route of giving up your home, you need to immediately find a new place to live in once your home has been short sold? Additionally, you have to bear with the inconvenience of allowing potential buyers to view the property or you even have to put up with agents conducting open houses to attract buyers. Whereas in foreclosure, it is possible (depends on which state you are in) for you to stay in your home (with no rent) for four months to a year before they can compel you to abandon your foreclosed home. By saying this, I do not necessarily mean that you go for a foreclosure.

Shorts Sale Information: Effect on Credit Score

Now let’s go to the next reason why a short sale is preferable over the dreaded F: effect on credit rating. Actually, the difference in the credit ramifications of the two on credit record is not gaping. A short sale will often appear on your record as ‘pre-foreclosure in redemption’, ‘settlement’ or ‘settlement for less than owed’. You also have to realize that if your lender allows a short sale, most likely, your credit record already would have reflected a little blemish since you have to be delinquent on your payments for your application for short sale to be approved. You would not want these logs to be in your credit record, but with a short sale, expect a decline in your credit score by 80 to 100 points. But do not worry because they can possibly be taken off your file in a few years or less. You can also possibly negotiate with your lender and ask not to report the short sale to the credit agencies.

In comparison, your FICO score may go down by a whopping 200 to 280 points with a foreclosure. This unfortunate way of losing your house will also be reflected on your credit record for as long as 7 to 10 years. In this aspect, a short sale is definitely the lesser evil.

Short Sale Information: You May Be Obliged To Pay For Deficiency Balance

There is a way to keep your credit rating intact. This is by paying for the deficiency balance left after short selling, the deficit between the mortgage balance and the selling price. However, if you cannot settle this, your credit record may have to brace for another blow as your lender can file a judgment in an effort to collect the full or a portion of the deficit. This will be logged on your record and may possibly pull down your rating even lower. This record will stay on your credit record for seven years. Having this in your file may give you a hard time getting the credit approval of other creditors.

Before going for a short sale, gather all the short sale information you can get to aid you in weighing your options and help you prepare for what to expect.

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The Secret Formula To Writing A Short Sale Hardship Letter

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Like writing a love letter, writing the short sale hardship letter is crucial in wooing your lender to allow you to sell your house as a short sale. Financial statements and pay stubs flatly show how much you make and how much you spend. The hardship letter tells bankers how your financial situation affect you personally. That is why, lenders give this letter weight in their decision in allowing a short sale. If this is so, you may wonder, what must you include in a hardship letter. Here are the things you must consider.

The Recipients of Your Short Sale Hardship Letter

When writing your short sale hardship letter, put yourself in the bankers’ shoes. Although most of you may think that bankers have no emotions, keep in mind that an actual human being will be reading your letter. Show courtesy and appeal to their emotions. Another thing you must remember is that bankers are often swamped with the same letters from other homeowners. Although we encourage you to compellingly and descriptively explain your story, do not write a novel. Your one-page letter should recount reasons, dates and situations explaining your predicament.

What Must You Include in A Short Sale Hardship Letter

Reasons Why You Can No Longer Afford Your Payments. Think about what events have pushed you into this tight spot and led you to default on your payments. Did you go through a divorce, suffer a medical condition, lose a job or did someone die in the family? Be honest and do not make up stories. Specify dates of when the unfortunate event happened and the series of events that led to it including the times when you failed to make payments.

Actions You Took To Handle The Situation. Show your lenders that you made effort in handling the problem. Maybe you sold some things at home or you waited on tables or took an extra job to raise money to pay for mortgage.

Bad Circumstances In Your Neighborhood Affecting The Value Of Your House. Include certain unfortunate events in your specific neighborhood that you may know of, such as a spate of foreclosures in your street, decline in values of properties or increase in taxes in your area.

Permanent Circumstances That Led To Hardship. State in your short sale hardship letter whether or not the difficulties you are facing are permanent. Permanent situations, such as cases of death, divorce or serious illness may bear more weight. Temporary circumstances such as being unemployed can still be improved, hence, short selling your house may not be the best recourse. A loan modification may be recommended.

How a short sale hardship letter is written can make or break your request to short sell your home. Look at it with bankers’ eyes: make it concise but compelling enough to appeal to their emotions.

How To Buy A Short Sale Home

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Buying A Short Sale Home: Is It Worth It?

Want to buy a new home for less? Some home buyers and real estate investors look to buying short sale homes. You can acquire a property for as low as 40 percent of its original worth. These crazy prices make buying a short sale home worth it, that is, if the lender gives the thumbs up.

A short sale can be trying not just to the seller but to you, the buyer, as well. It can turn into a waiting game if the creditor is reluctant in allowing the process and in shouldering the losses. Be prepared to wait for months to complete your purchase. If you are pressed for time though, you can find bargains from foreclosures and some upper-fixers.

How To Get The Lender To Approve A Short Sale Home?

You practically cannot influence the lender to approve a short sale except by offering a considerable bid price. One important reason that the lender will deny a short sale or turn down your offer is if they are not happy with the bids submitted and think that they can make more money by foreclosing on the house. Typically, lenders will request one or more appraisals and may also ask for a Broker’s Price Opinion. A comparative market analysis may be needed to defend the price offer. However, offering too much just to get the lender’s approval could defeat your purpose of buying a short sale: get a great bargain. If you have the wherewithal, find out if the particular lender you are dealing with would put weight to substantial down payments, then offer to pay a considerable amount or even in cash if they are swayed by this.

Although you have no control over the other matters, you should at least know what will make the thumbs of the lender go up so that at least you would have some idea of your chances of buying the short sale home. The mortgage provider must be convinced by the financial difficulty of the seller through the hardship letter. If the lender has funded a number of properties currently in the throes of foreclosure, a short sale may be approved to reduce the number of foreclosures. The lender will also check the Disbursement Estimate to check if the seller has received money.

5 Steps In Buying A Short Sale Home

1. Research before you submit an offer to purchase. To guide you in coming up with an appropriate price, ask questions such as: who is in title; how much is the mortgage balance; has a foreclosure notice been file already. It is also important that you know if there is a second mortgage as this can also affect whether a short sale can proceed. Ask also if you can reserve the right to inspection. Most short sale homes are sold on an as-is basis, which means that you are not protected. Protect yourself by checking out the property.

2. Hire a competent real estate agent with solid experience in short sales. Your agent can help you with the research above and in contacting and coordinating with the lender.

3.Get in touch with the loss mitigation department of the mortgage provider and furnish and Authorization Release Information form signed by the seller. You will know about your chances of buying the property from this department so take note of names and numbers to make your follow up.

4. Submit your offer, the required documentation and a copy of your earnest money deposit. If you qualified for a pre approved loan, also submit a proof of this.

5. Wait. In the first few months after you proffered your bid, expect that even if you made the highest bid, the bank may not consent a short sale. They would buy time waiting for a higher offer. This delaying tactic is what stretches the short sale process to take several months or even over a year.

Buying a short sale home can be profitable to real estate investors and budget-friendly to home buyers; however, the strung-out process can discourage would-be buyers to pursue the purchase.

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9 Critical Reasons Why You Must Avoid Short Sale Homes

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Are you one of those people scouting for listings of short sale homes, hoping to buy property at a bargain price, either for personal use or as an investment? Although some people may have been lucky to chance on some great steals, there are a number of reasons why you must avoid short sale homes.

1. Sellers of Short Sale Homes Borrowed More Than They Should Have

During periods when the market was escalating, many lenders were motivated to lend money to the extent of lending borrowers more than the real value of the home. Subjective appraisals did not help to prevent this. There were some banks that allegedly, pushed appraisers to give an appraisal equivalent to the amount that the homeowners want to borrow.

2. Seller Bought Expensively

Many short sale homes, before they got under water, were originally bought at a time that the market was leaping, hence, the homeowners bought them at relatively expensive prices. However, now that the market has taken a nosedive, the homeowners no longer have equity. So when you buy a short sale, it does not really mean that you are enjoying a great discount that really is not there. For example, if the short sale home you are considering to buy was originally acquired some years ago by the homeowner for $300,000, and now it is offered at $200,000. Do not think that you are luckily fetching $100,000 of equity at no cost.

3. Short Sale Homes That Are Ineligible

Beware of homes listed as short sales even if homeowners have not discussed short selling with their lenders yet or have not yet gone through pre-qualifying assessment yet. Some unprofessional real estate agents urge homeowners to contemplate on short selling their house even if the seller is not qualified.

4. A Waiting Game

Processing short sales could take between two weeks to several months before you can close the transaction. Some factors that contribute to the sluggish process include incomplete paperwork submitted by the seller and the logjam of foreclosures faced by the lender. Additionally, lenders also take their sweet time waiting for higher bids if they do not like the current prices being offered. If there are two loans secured to the property, then you will be dealing with two lenders and the process may just protract because you need to satisfy two sets of demands.

5. Not All Short Sale Homes Sell At A Discount

As previously mentioned, lenders often take their time approving a short sale because they are waiting for higher offers. They will budge only when offers are at par with comparative prices in the market. The lender would prefer to foreclose on a house if he thinks that he can get a better price there than in short sale, so he delays approving a short sale request, waiting for a higher offer. In effect, short sale homes are sold at market value or at least close to market value.

6. “As Is” Selling Condition

If you buy short sale homes, typically, you are to buy them at their present condition. Banks will most likely not pay for your home protection plan, roof repairs or roof certifications, proposed repairs reported on a home inspection, pest inspections or work needed to furnish a clear pest report, and deferred maintenance.

7. Changing Conditions of Lenders

Do you have lawyers at your disposal? Watch out for lenders who reserve the right to change the conditions of the short sale at the last minute. There are lenders who do this depending on shifts in the market, enactment of new laws or some new information gathered. Lenders can make this renegotiation at their whim because they have lawyers at their disposal.

8. Steep Closing Costs for Buyers

Most lenders do not pay for any additional costs. In some cases, they even will not pay for transfer taxes and other customary seller closing costs. You will have to pay for any extras you want, such as if you would like to conduct particular inspections.

9. Lender Often Controls The Transaction

The lender of the seller is in control in a short sale. The closing process in a short sale can last for an unknown length of time. This disables you from being able to target a specific date to close escrow.

At first glance, buying short sale homes may be a great way to acquire great deals; but knowing the nitty-gritty of the transaction may turn buyers’ feet cold.

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