Scottsdale AZ – We had a negotiator at Bank of America try to push us around a little while ago. We’ve studied and analyzed all of the short sale guidelines and rules.
This was an FHA loan and therefore would be governed by FHA’s Short Sale Guidelines. This means that the lender must follow FHA’s Specific Instructions on how to handle the short sale. Here’s what happened.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Scottsdale AZ – Many lenders ask for a promissory note on short sales. This is especially true if the lender has Private Mortgage Insurance (also called PMI) that has to approve the short sale.
The PMI companies know that homeowners will do anything to protect their credit when they are short selling their home.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Scottsdale AZ – Another common type of loan that does not usually have a deficiency is a “Sliced and Diced” loan. A “Sliced and Diced” loan is a loan that has been securitized along with a bundle of other loans.
Here is how that happened. John gets a loan from ABC Bank. ABC Bank is running out of money to lend out. So, they sell 1,000 of their mortgages to Goldman Sachs.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Scottsdale AZ – Another common type of loan that does not usually have a deficiency is a USDA loan. The USDA loan program was created to make it easier for people that lived in rural areas to buy their own home.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
USDA stipulates that you must be at least 30 days behind on your payments before they will start the short sale process. This is different from most other loan programs.
I haven’t heard of another loan program where they specifically stipulate that you must be behind on the payments before they will consider a short sale.
Scottsdale AZ – The next most common type of loan that does not usually have a deficiency is an FHA loan.
But, how do you determine whether or not you have an FHA loan?
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Here is the best way that I have found to do this. Look up your mortgage on the public records in your county. You can usually access the public records online.
Scottsdale AZ – OK, let’s talk about the most common types of loans that do not require a deficiency on a short sale. The first common loan type is a Fannie Mae or Freddie Mac loan.
I’ll call them Fannie & Freddie in this post. Freddie & Fannie are different quasi-governmental entities that own mortgages. For our conversation, they are very similar in the way they handle short sales.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Scottsdale AZ – I am about to explain how the different types of loans impacts whether or not you will have a deficiency after you short sale your house.
But, I first want to bust the common myth that you won’t know if you will have a deficiency until after you have started the short sale process.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Scottsdale AZ – We recently received an email from Joy. She was thinking about a short sale, but was worried about a deficiency.
Here is a sentence from her email: “We obviously want to get the price as close to fair market value as possible to eliminate or reduce any deficiency the bank may assess, but also want the house to move as quickly as possible.”
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Scottsdale AZ – Thinking about a loan modification. If you can afford to, then order an appraisal. Or, do your own appraisal.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Ask your realtor “Hey, what are houses in my area selling for?” I’ve seen people who bought a house for $500,000. Guess what’s it selling for today? $300,000.
Scottsdale AZ – I received a note the other day from Andrew. He was upset thinking I would tell people who are upside down on their Phoenix or Scottsdale home loans to ask for a principal reduction from their lender. Here was his email:
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
“I saw your blog post about how the banks won’t approve principal reductions for people who are struggling financially.
You recommended that anyone upside down should short sale their house because that is the only way to get the amount they owe reduced.
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