What is a Short SaleWhat 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 mortgage loan. A short sale happens when the homeowner cannot pay the mortgage payments due to a hardship event and the bank/lender agrees that selling the property at a loss is better than proceeding with foreclosure. Banks/Lenders will deny a short sale request if your position is that you are upside down. Just because the value of your property has dropped below what you owe does not mean you will have the ability to do a SHORT SALE. Lenders require there to be a genuine hardship before they will consider taking your settlement offer for less than what is owed.
Banks/lenders are more inclined to consider a short sale if you lost a job you had many years, or you transferred to another state, you are facing divorce, or serious illness or other loss of income situations. These are all good reasons to explain in detail in your hardship letter. You must be honest and hold nothing back when explaining your inability to no longer afford your mortgage payments. A great letter will state the WHY, WHAT, HOW and Prognosis for the future. Your letter should include: · An apology to the lender is a great way to start. Remember it is not the bank’s fault that you agreed to the mortgage in the first place. A little humility will go a long way. You are asking the bank to forgive a portion of your debt. · Explain how you were able to make the payments before your hardship. They only want the fact so you are not going to write a novel here. You may have gotten into an option ARM where the rate was 5% and it reset to 10% but your hours at work were reduced. Or you and your wife were working at the time you bought the house but one of you was laid off and can’t find a job. · Explain what you have done to try to continue to make your payments. Did you use up your savings? Did you get a part time job? Did you borrowed from family? · If you are seriously consulting an attorney about bankruptcy, by all means tell the bank about this. · Explain that you will be listing the property with an agent · Always remember to be courteous and thank them for their understanding and assistance. | Download Reports
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