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With our extensive education in short sales (all employees are CDPE, CNE and SFR Certified) and applied knowledge of the foreclosure process we are actually getting short sales approved within 45-60 days after we submit the initial hardship package to the bank. At InStone Real Estate Group, we do not charge any upfront costs and we do not get paid until we have successfully closed your transaction. Please watch out for Foreclosure/Short Sale companies that offer a solution, but also ask for any up-front fees. I feel that they charge this because they lose too many short sales and they need the extra money to cover overhead. We are also very well versed in BPOs (Broker Price Opinions) and price properties in favor of all parties.
What is a short sale and how do we get started?
Basically what you are doing in a short sale situation is you owe more than your house is worth and/or in some cases you just cannot afford it any more. If so you need to apply to the mortgage company for a short sale. The following steps will help in explaining the process:
· Your property must be listed by a licensed real estate agent.
· You have to provide the following documents
· Completed Financial Statement (broker provides)
· Last Two Months Pay Stubs
· Last Two Years Income Tax Returns
· Last Two Months Bank Statements (all pages)
· Financial Statement (Provided by Broker)
· Any correspondence from attorney regarding foreclosure
· Hardship Letter
i. We will give you examples for you to review.
ii. Supporting documentation in reference to hardship letter (if available), divorce, medical, bills, etc
· Once the short sale package is submitted, it is set for review by mortgage/lien holders in their loss mitigation department.
· They hire a 3rd party BPO (broker price opinion) specialist to determine the actual value of the subject property.
· Then the first mortgage holder determines what they will allow the second (third lien, etc) mortgage to have.
· In some cases the first will only allow $1000-$5000 to the second mortgage holder.
· The file then goes to review and the approval is issued.
· Once the short sale is approved, we will have a closing/moving date in mind. Our timing gets better every year.
· Because we put the offer in right away we are one of the fastest in the state at closing Short Sales.
· This depends on the bank's short sale process and the marketplace and foreclosure rates in the given area.
· Please note that there are certain guidelines for HUD/FHA loans. Please inquire within.
For information on foreclosures and short sales please
CALL OR EMAIL303-246-8641 OR INFO@ISFRE.COM InStone Real Estate Group is your Colorado Short Sale Real Estate Partner or go to:
The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Colorado residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:
· Reinstatement: A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.
· Benefit: Does not require the mortgage company or lender's approval.
· Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.
· Forbearance or Repayment Plan: A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
· Benefit: Allows the homeowner to make back payments over time.
· Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to 'qualify' for forbearance.
· Mortgage Modification: A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.
· Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
· Drawback: Requires that a homeowner 'qualify' for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.
· Rent the Property: A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.
· Benefit: Allows homeowner to keep property indefinitely.
· Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.
· Deed in Lieu of Foreclosure: Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.
· Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
· Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.
· Bankruptcy: Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.
· Benefit: Does not require lender approval.
· Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.
· Refinance: If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.
· Benefit: In some cases, this will lower payments.
· Drawback: In today's market, a refinance will almost always raise mortgage payments, and is an expensive process.
Servicemembers Civil Relief Act (military personnel only) If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.
· Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
· Sell the Property: Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.
· Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
· Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale.
· Short Sale: If a homeowner owes more on their property than it is currently worth, then they can hire a Certified Distressed property Expert, to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market licensed Real Estate Broker and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.
· Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
· Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.
This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options.
Foreclosure and Short Sale Solutions www.isfre.com
Call or Email 303-246-8641 or info @isfre.com