Distressed Properties

Forbearance. Lenders may let you make a partial payment, or skip payments, if you have a reasonable plan to catch up. Tell your lender if you expect a tax refund, a bonus, or a new job.

Reinstatement. Reinstatement refers to making a payment that covers all your late payments, usually at the end of a forbearance period. Repayment Plan. If you can’t afford reinstatement, but can start making payments to catch up, the lender may let you pay an additional amount each month until you are caught up.

Loan Modification. Your lender may agree to amend your mortgage to help you avoid foreclosure. The options include:

• Adding all the missed payments to the loan amount and increasing the monthly payment to cover the larger loan.
• Giving you more years to pay off the loan, lowering the interest rate, and/or forgiving part of the loan, to lower your monthly payment.
• Switching from an adjustable-rate mortgage to a fixed-rate mortgage, so you aren’t exposed to increases in your monthly payment.
• Requiring amounts for taxes and insurance to be included with your monthly mortgage payment so you avoid big bills in addition to your mortgage.

Sign Over The Property To Your Lender In Exchange For Debt Forgiveness. This can hurt your credit, but is better than having a foreclosure in your credit history.   What is a short sale? A short sale is a program that allows the home-owner to sell the home for less than the amount owed on the mortgage.

What are the benefits of doing a short sale? • You avoid a foreclosure sale. • The impact of a short sale on your credit and general financial stability is much less than the impact of a foreclosure. • You will be able to purchase a new home much sooner than if you had a foreclosure on your credit. • You can live in the home until new owner closes escrow, leaving time to make other living arrangements. How do I qualify for a short sale? You may be eligible for a short sale if you have an involuntary hardship and can no longer afford the monthly payments on your mortgage, or you are unable to sell your home for the full amount owed on your mortgage. How does a short sale work? We will meet with you to discuss if a short sale is the best option for you. If it is, we will provide you with the necessary forms and gather your financial information for the bank. Then, we will put your house on the market at an agreed upon price. Once we have an offer to purchase your home, we will present it to the bank (or banks if you have a 2nd mortgage with another bank). When should I begin the process? As soon as you possibly can. Foreclosures tend to be extremely time sensitive. The sooner we can begin negotiations with your lender, the greater chance of a successful resolution. How much will it cost me to do a short sale? You will not pay any commissions or negotiation fees, have to make any repairs or pay for any inspections. The bank pays all these costs when the property sales. How long does a short sale typically take? Every short sale is unique and follows its own timeline. Typically, a short sale is completed within 2 to 4 months from the time we have a complete short sale package ready to present to the lender. What other details should I be aware of? • Be sure to talk to your tax advisor about the tax implications of a short sale. • Before you secure a buyer, be aware that most banks will not allow the buyer to be a family member or someone with whom you have a close personal or business relationship.

Foreclosure vs. Short Sale

Foreclosures: • A foreclosure on your credit report is said by mortgage and credit experts to have the 2nd worst possible result… the 1st is bankruptcy. • The bank can still take full and legal & financial action against you after the foreclosure. • If you have multiple loans on your property you will have multiple late mortgage payments. This makes it difficult to get your credit back. • Foreclosure does not allow you to procure an offer of the highest price possible in order to minimize your potential tax consequence. • After a trustee sale, the lender can initiate a sheriff’s order to lockout and evict you and your family – leaving you unprepared to move.

Short Sales:

     • Allows you to list and sell your home as soon as hardship hits – minimizing the credit impact. • Property value is based on current market price – minimizing any tax liability. • Short sale sellers are widely seen as less risky than foreclosed sellers from a credit standpoint. • You may qualify for government assistance. • Allows you and your family the time to secure a new home. • Allows you to negotiate the outcome of a deficiency judgment before the close of escrow. • Short sales are about taking control of your future & finances, giving your family and you a fresh start.

Andrea Gressinger and the Gressinger Group are committed to helping you make the best decisions for you and your family. Andrea Gressinger is a certified Short Sale Specialist (SFR) by the National Association of Realtors (NAR).