Nevada County, Placer County, Sacramento, Lake Tahoe, and Beyond Homes - Land - Commercial U.S. and International Relocation and Real Estate Investment Services
Current Descriptions of Possible Options to Stopping Foreclosure in California*
*This page does not constitute legal or tax advice. This page is for general reference only. You must consult your attorney and tax advisor immediately. After which you may contact me to get your home sold if that is an option.
PLEASE CONSULT AN ATTORNEY AND TAX ADVISOR IMMEDIATELY
What Should I do when I get behind on my Mortgage?
We get asked this question a lot.
1. Don't ignore the phone calls and letters from your lender. This is the best way to wake up to a knock from the CA local Sheriff telling you to vacate the home. Take this matter very seriously and work to resolve the problem as quickly as possible. Keep track of all correspondence you receive for later reference.
2. Stay in your home. In California, you may not qualify for foreclosure help if the house is vacant. Your home, if proved vacant, can be seized. Stay in your home!
3. Contact Gary to discuss what the best foreclosure solutions are for you. We understand the system, the foreclosure laws and the chain of events necessary to help you keep your home out of foreclosure. We will gladly walk you through them in a non-threatening way.
We know in this economy making your mortgage payment is getting tougher and tougher. Given the state of the California economy it is hard to say when it will get better. We are here to help if you have missed a mortgage payment or already are heading to default with your lender.
What are some possible options to save my home from Foreclosure in California?
1. Reinstatement - Pay the Mortgage Company all of the back payments to bring your mortgage current. This option is rarely attainable. The Mortgage Company will add late fees and Attorney fees on top of your back payments making this amount much more than people are able to come up with.
2. Workout - We can negotiate with your Mortgage Company to bring your loan back in good standing. There are many options available to us to get a work out approved. Some examples are as follows: a. Loan Modification - We may be able to adjust the terms of the loan to meet your financial situation. b. Forbearance - We will be able to arrange a payment plan based on your financial situation. This is mostly used in the instance of a tragedy or temporary loss of employment. c. Partial Claim - You may qualify to have the repayment amount applied to the end of the current loan and resume normal payments.
3. Refinance - We have established partnerships with very reputable lenders who can give loans on mortgages that are in foreclosure if there is enough equity available.
4. Sell Your Home - You may simply sell your home before the Foreclosure Sale Date. Sometimes the home owner is unable to sell the home outright at the desired sale price and this is not an option. We may be able to negotiate a Short Sale on your behalf with your Mortgage Company. (SEE BELOW INFO ON SHORT SALES) In this instance the Mortgage Company may take less than what you owe on the loan to avoid a lengthy and costly foreclosure process.
5. Deed-in-lieu of Foreclosure - Simply give the home back to the Mortgage Company and walk away with a clean slate.
6. Bankruptcy - This is a last resort. This will only save your home temporarily. If you miss one payment during this process the lender will put you right back into foreclosure. This is like putting a band aid on a bullet wound... we will still need to come up with a permanent repayment solution to get your house payments back on track. Please get in touch with an Attorney to file the necessary paperwork.
7. Foreclosure - You may elect to allow the home to be entered into mortgage foreclosure. This is the most damaging to you. The Mortgage Company will take your home and all of your equity. If there is no equity they may come after you* to pay the shortage or 'deficiency'. This is also the most damaging to your credit and your ability to acquire another home loan.
FREQUENTLY ASKED QUESTIONS
What is a short sale? A short sale is an agreement with the lender(s) to accept less than the amount owed by a borrower via a sale of the property to a non-related third party. When a borrower is faced with a hardship, has fallen behind (or is likely to fall behind) in the mortgage payments and the home cannot be sold for the amount owed to the lender(s), a short sale agreement may be an alternative for distressed homeowners. SSA negotiates with the lender(s) to accept a payoff of an amount allowable by the market conditions. The lender(s) then receive the complete proceeds of the sale and discharges the remaining debt.
Why would a lender agree to accept less than what is owed? Whether the lender chooses to go through with a foreclosure or agrees to a short sale, they are taking a loss. However, lenders are not in the business of owning and managing properties; in many cases they would take less of a loss with a short sale and resolve the matter in a shorter timeframe. A short sale gives the lender the ability to cut its losses upfront and avoid a potentially greater loss through the expense and time of a foreclosure; the benefit of working with SSA is that we diligently negotiate to secure an equitable resolution with your lender.
Do I qualify for a short sale? To qualify for a short sale, you must be able to prove to your lender(s) that you are a victim of a "hardship" and therefore unable to continue making payments on your mortgage. Qualifying for a short sale is dependent on individual circumstances. If you answer "yes" to the following questions, you may be a good candidate for a short sale: * Have you experienced an unforeseen hardship since you obtained financing for your property? * Do you owe more on your property than the amount your home could sell for in the marketplace today? * Do you have significant difficulty in making your monthly mortgage payment?
What are some examples of "hardship"? A hardship situation is one that is the result of some extenuating circumstance that leaves the borrower unable to afford their mortgage payments. While each situation varies, some frequent examples of hardship include:
* Divorce or Separation * Health issues or medical bills * Job Loss or reduction of income * Death of spouse or wage earner * Adjustment in Mortgage payments * Employment relocation * Failure of Business
The above list is not necessarily inclusive of all circumstances that a lender may consider a hardship.
Typically, how long does a short sale take? All short sale situations are unique and follow their own timeline, but a general estimate is 2-4 months. Many variables are associated with the timeframe:
* How quickly an offer is generated and accepted by the seller * How quickly the lender responds to the offer (dependent on the quantity of other short sales the lender is processing) * How many other lien holders need to provide approval
When should I begin the short sale process? Time is of the essence; short sale situations tend to be time sensitive and consuming for negotiations and the sooner SSA is able to begin negotiating, the greater the chances of a successful resolution. If you foresee trouble in making your monthly mortgage payment, you should begin considering your options. The best time to begin the short sale process is before you miss your first payment to allow more time for lender approval; there is no need to wait until the lender sends you a notice of default or initiates formal foreclosure proceedings. If a Notice of Default has been filed or a Trustee Sale has been set, contact us as soon as possible. It is not uncommon for a lender to postpone a Trustee Sale when presented with a pending offer.
How do I get started? Contact us today to let them know you'd like to negotiate your short sale.
Do I have to move out of my home? If you lender(s) approves a short sale, you do not need to vacate your home until it closes escrow.
How will a short sale affect my credit? We are not credit experts and speculation varies greatly as to the impact a short sale will have on a credit report. In a short sale and foreclosure situation, the delinquency of the mortgage will likely have a negative impact, but it is generally understood that a foreclosure will have more serious affects on your credit. Some mortgage and credit experts suggest that a foreclosure may impact a credit score up to 250 points, while a short sale may result in a reduction of 100 points or less.
What are the tax ramifications of a short sale? In December 2007 the Mortgage Forgiveness Debt Relief Act was signed into law by President Bush. This law eliminates potential tax liability associated with a short sale depending on the specifics of your particular situation. On a state level, a taxpayer may or may not face tax consequences, again depending on individual circumstances. Although we have some resources available here, we are not a tax or legal advisor; a homeowner should seek professional tax and legal advice.
Why shouldn't a seller or agent negotiate with a lender directly? Most Loss Mitigation Departments are understaffed and overloaded with countless cases. Unfortunately, loss mitigators can be very difficult to reach and when you finally do make contact, you have very little time with which to make your appeal. Furthermore, the stress of the situation makes it difficult for a homeowner to effectively negotiate their way out of foreclosure.
Short Sale Service Negotiators work as a neutral third-party short sale negotiator; this is truly an advantage when speaking with lenders because we seek the best outcome for all parties involved. Our experience and professionalism ensure homeowners, real estate professionals and lenders receive complete satisfaction throughout the short sale process. Additionally, because they work with countless lenders, we understand how to effectively gather and present the information that lenders require. We have excellent working relationships with the Loss Mitigation Departments and we leverage our network and expertise to help resolve the current situation.
Homeowners may also wish to visit the U.S. Department of Housing & Urban Development's website for more information and resources for avoiding foreclosure: www.hud.gov/foreclosure/
Some of them have fallen trap to the loan mod fiasco and paid some person a lot of money for nothing.
When we do a short sale, we tell clients we are in the same boat. . .no can guarantee you a successful short sale.
If we get it approved and closed... we get paid by the bank... if we don't... we all lose. So of course we try hard.
Look, the bank even pays the CLOSING COSTS!
How much it costs to do short sale: If you call us . . it will cost you nothing out of pocket usually!
PLEASE CONSULT AN ATTORNEY AND TAX ADVISOR IMMEDIATELY.
Then contact us to get your home sold!
*This page does not constitute legal or tax advice. This page is for general reference only. You must consult your attorney and tax advisor immediately. After which you may contact us to get your home sold if that is an option.
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Gary J. Tippner CA DRE# 01871153 Real Estate Source, Inc. #0186919 REALTOR® / Short Sales and Foreclosure Resource SFR Certified Phone: 1-877-311-GARY Fax: 1-888-965-0018 Contact Gary at
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