Avoiding Foreclosure in Sacramento

By: Darrel Clark Click author's name for more of his/her articles

If you have enlisted the service of a Realtor to help with sell of your home or thinking of doing so, to process the Short-Sale your Mortgage Company requires information and specific documents from you.

Please be sure to provide everything required. Any delays or missing documents could give your Lender reason to close your file.

Your lender requires the following:

• Handwritten Hardship Letter

Explain your situation: why you are experiencing financial distress, what happened, when it started, and what you are trying to do to fix it.

• A Financial Worksheet

Your Mortgage Company needs to see what your income is in relation to your expenses. Be sure to include everything that costs you money including your mortgage. The lender is looking to see if you have positive monthly income or are unable to meet your obligations.

• 2 Most Recent Tax Returns

Include all schedules and W-2's

• 2 Most Recent Bank Statements

Be sure to include ALL pages from All accounts

• 2 Most Recent Pay Stubs (2 Months Worth)

***In some cases your Bank or loan type may require additional documentation, or they may require that you update your documentation, so always keep important paperwork handy and be ready for those requests!

Your Negotiator May Also Require The Following:

• An Authorization To Release Information
• Copy of Recent Mortgage Statements
• Copy of any correspondence received regarding the property from attorneys, your mortgage lender lien holder(s), bankruptcy trustee, or probate.

• Any Paperwork Regarding Any Other Liens And/Or Judgments.
• Property Tax Records
• A Copy of Your Warranty Deed
• HOA Information
• Negotiation Agreements and Disclosures

The Process: What To Expect

Short Sales can be stressful and a time-consuming process. But in many cases they are necessary in order to get you out from under mortgage debt, especially with the property values declining. By performing a short sale, you will be able to take a large bite out of the money you owe to your Mortgage Company.

Here is what to expect when going on with the Short Sale:

Step 1: Marketing and Paperwork

The property must be listed for sale at fair market value "subject to your lenders approval." This step is important - it shows your Mortgage Company that you are making a diligent effort to sell your home. To process the Short-Sale your lender requires information and paperwork from you. Be sure to provide everything your Lender or the one helping you with the Short Sale asks for. The longer you wait getting your paperwork together or only giving Some of the documents required could give your Lender reason to close your file or Deny the Short Sale.

Whoever helps you with the Short Sale should give you a list of things you are going to need.

Step 2: An offer is received
Step 3: Short Sale package is submitted
Step 4: Lender orders an appraisal or BPO
Step 5: Negotiations
Step 6: Home is SOLD

Typical Lender Timelines

Typical Bank Timelines (for each step in the Short Sale Process)
• Get the authorization on file with lender 2 days
• Compile Short Sale documents 7-14 days
• Get Short Sale on file with lender 3-7 days
• Short Sale Package on file with Lender 3-7 days
• Short Sale Package assigned to negotiator 10-14 days
• Get BPO/Appraisal ordered 14-21 days
• Schedule BPO/Appraisal with agent 5-10 days
• Time for BPO/Appraisal to get to negotiator 21-28 days
• Negotiate/Obtain approval from negotiator 15-20 days
Total: 77-104 days

Things To Keep In Mind

Here are some things to consider when doing a Short Sale:
• There is no guarantee that all offers will be accepted! Depending on the offer price and other conditions, the Lender may say "no" to the first offer that is made on your property.
• The Short Sale Process can take anywhere from 2-4 months or longer depending on the foreclosing lender.
• Your Lender or Bank will not allow you to receive any funds at closing. (FHA loans have a pre-foreclosure sale program that allows a Seller incentive)
• You may be liable for a taxable event or deficiency judgment for the difference owed to your Lien holders(s). There are exemptions you may be eligible for. Ask an Attorney for Details.
• You may be able to qualify for another home in 2 years provided you maintain your credit and income.
• You should always seek legal counsel and the advice of a tax professional.

Calling an Agent - The Best Decision

The Lender's prefer to work with Real Estate Agents. They trust your Agent will provide legal, ethical, and experienced assistance. They know that your Realtor understands the market, your area, and how to properly price, list, and sell a home. The opinions of your Realtor will be well received by The Mortgage Company and will ultimately help them make a decision in your favor.

Why Your Agent is The Best To Work With?

Your Agent is part of an industry leading team that successfully processes Short Sales nationwide. They are experienced, they stay current with lender requirements, they will handle your Short Sale with expediency an care.

Plus - your Agent uses a cutting-edge transaction management tool that will keep you in the loop throughout the transaction. You will receive instant email notification anytime the file is updated.