| The phone rings, and rings, and rings. The last | | | | have a list of timetables in Foreclosure Myths and |
| thing you want to do is pick it up just to talk to | | | | Cashing In that can help you figure this out. |
| another bill collector, but the truth is you've fallen | | | | Once you know what kind of time you're dealing |
| behind on just about everything. This time the | | | | with, the next step is to contact the mender and |
| machine picks up, and it's not the credit card | | | | discuss your situation. DO NOT just call the |
| company - it's your mortgage company warning | | | | customer service number! They are trained to |
| that they are about to turn the matter over to | | | | say "no", and have no authority whatsoever. |
| their attorneys and start the foreclosure process. | | | | Contact the "loss mitigation" department, or the |
| What do you do now? | | | | legal department and request a "short sals |
| Real estate has fallen on hard times, and the | | | | package". This will include a checklist of what you |
| economy has suffered. Thousands of people are | | | | will need to provide the lender in order for them |
| living the nightmare I just described, and its | | | | to approve any type of concession on the |
| becoming far too common in todays society. | | | | mortgage. Once received, be prepared to put |
| Everywhere you turn, foreclosures are in the | | | | together the following: |
| news. Television, radio, magazines - even at dinner | | | | * Hardship letter; |
| parties, it's hard not to talk about the latest | | | | * Income/expense/asset worksheet listing all |
| foreclosure stats, and wonder when it will be your | | | | your income and expenses |
| turn. But there is something you can do, as long | | | | * Neighborhood comparable values and properties |
| as you get proactive and put a plan of action in | | | | on the market |
| place. The latest plan has nothing to do with the | | | | * Repairs and systems that will need to be fixed |
| government, its called the "Short Sale". | | | | (if they have to take back the property) |
| A short sale is where a transaction takes place to | | | | * Bank statements, bills, colleection notices - |
| sell the property, where the mortgage exceeds | | | | anything that shows your in dire straights |
| the sales price. The lender agrees to take a short | | | | * Lots of pictures - inside and out that shows the |
| sale to solve the problem and avoid the expense | | | | condition of the property and the neighborhood |
| and hassle of going through the foreclosure | | | | (try to get other "For Sale" signs in the pics!) |
| process. For years, lenders have denied they | | | | Ask them to come down to at least 75% of the |
| would even consider a short sale! The lenders legal | | | | CURRENT value of the property. If that means a |
| department simply said they would not take less | | | | 50% reduction on the mortgage, then ask for it! |
| than the amount due, or they would go into | | | | The worst they will say is no, and they might just |
| foreclosure. As the foreclosures starting piling up, | | | | counter back at 65%! Either way, you have |
| a funny thing happened over at that lenders | | | | started the ball rolling for the next step - moving |
| office - they figured out that it is cheaper and | | | | the property. |
| less time consuming to take a loss up front, and | | | | There are plenty of investors and first-time |
| now short sales have become common place. | | | | homebuyers out there that want a deal. Connect |
| Most people don't realize that foreclosures cost | | | | with a Realtor(r) who specializes in foreclosures or |
| lenders thousands of dollars. On average, the | | | | short sales, and undercut the market by 10%. |
| lender will lose 30-40% of the value on the real | | | | You are not in this to win friends or impress |
| estate by taking a property through foreclosure. | | | | people at this point, you are out to move the |
| The lose the payments for 6 months to two | | | | property as quickly as possible. Once an offer has |
| years; the property gets trashed; it becomes a | | | | been received, then you can take the short sale |
| haven for vandels and drug dealers; the property | | | | package and submit it to the lender. They are |
| gets stripped of anything and everything worth | | | | much more likely to move on your proposal when |
| more than $2. In short, it becomes a drain on the | | | | they have a deal in place with another buyer - it's |
| banks system. But negotiating a short sale takes | | | | less of a headache for them! Be prepared for |
| some time, preparation and patience. | | | | them to come back with a counter offer, so |
| First, as a homeowner you need to face the fact | | | | make sure that your sales agreement is subject |
| that your going down. Not many things are more | | | | to approval from the lender. |
| emotionally draining than watching your home | | | | Short sales have become a cottage industry, and |
| come unraveled, but if the situation is dire, you | | | | there are many so-called professionals out there |
| need to face reality before it smacks you in the | | | | willing to take your money to show you how to |
| face. The better prepared you are, the less | | | | do it. You can do it yourself, and leave the |
| traumatic it will be for you and your family. Start | | | | commissions to someone who earns them by |
| by calculating how much time you have before | | | | selling your home. Work with realtors, real estate |
| the property becomes a statistic. In general, | | | | agents, investors and other mortgage |
| foreclosure proceedings won't start for 90 days | | | | professionals who have experience in the short |
| after payments have been missing. Once the | | | | sale arena. You don't have a lot of time to mess |
| foreclosure proceedings start, the process can | | | | around trying to learn the system, only to wake |
| take anywhere from 3 months to 2 years. Check | | | | up one day and find a foreclosure notice plastered |
| with your attorney or state website to see what | | | | on your door. |
| they foreclosure processing period is, and then | | | | So go answer the phone. You never know who's |
| the redmption period - the period in which you | | | | on the other line, but now you know how to talk |
| have available to bring everything current. I also | | | | to them! All the best to your future. |