Short Sale Help

What Are Short Sales?

Short Sale Help RI, MA

It is where a lender will accept less than what is owed on the balance of the loan and release their collateral by discharge.
A short sale is if one cannot pay his or her mortgage, not just to get out of a mortgage because their house loan-to-value is “upside down.”
Why do we have so many short sales today?
In the Late 80's short sales were called “Short Pays.”

A Seller’s credit is not as tarnished as a foreclosure, which is very hard to repair (There are always other factors involved such as credit card debt, etc.).
Sellers can generally remain in their property up to the closing date.
The Property is not abandoned like it usually is in a foreclosure situation.
The Seller’s lender generally pay the sellers fees, including attorneys, realtors, sewer, taxes, water, tax stamps, etc., and the lender generally does not go after the seller for the shortage in the payoff. If they do, it typically is less than what they would go after in a foreclosure deficiency judgment.
Present employment or future employment:
Some jobs do not permit foreclosures such as security exchange positions and government positions.

A Buyer would get to view and inspect the property without having to get it de-winterized like it would need to be in a foreclosure.
The Property is generally maintained, not broken into or vandalized.
The Buyer generally enters into a traditional form of a purchase and sales agreement with certain verbiage that would grant more rights than a foreclosure.
The Buyer gets to deal directly with the seller who has knowledge of the property and provides a sellers disclosure versus dealing with a bank that has no knowledge of the property.
The Buyer would be able to get a Warranty Deed as opposed to a Quit-Claim Deed or Bargain and Sale deed.

A short sale keeps the lenders from having to manage properties.
Lenders generally save money by not having to foreclose - stops interest loss, maintenance fees, boarding-up fees, property security fees, foreclosure fees, taxes, insurance, vandalizing expenses like stolen copper, and the upkeep of the property.
It is good for the public, keeps neighborhoods from being boarded-up which therefore keeps other values in the neighborhood up.
Lenders have pressure on a federal level to get the properties out of their portfolio since it affects their ability to sell loans on the secondary market.

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