Homeowners Facing Foreclosure in Reno, NV must know about Short Sale ! What is a Short Sale ?
03-Aug-2012 | News-Press Release
Property owners in the Reno, Sparks, Carson City, North Valleys, Washoe County, Spanish Springs, Sun Valley, Summersett and other neighbouring areas facing foreclosure options have options. One of them is a short sale
A short sale is when a home is sold for less than the amount owed to the lender or lenders. The majority of homes in Nevada currently listed or recently sold have been in the form of a short sale. Selling your home for less than what is owed is not an easy decision. However, if you are in a position where you are extremely upside down in your mortgage or facing a foreclosure, a short sale may be an option to consider. The benefits of a short sale often include
- Less damage to your credit than a foreclosure. A short sale is not reported on your credit history. A foreclosure is reported and stays on your credit for up to 10 years.
- A homeowner who successfully negotiates a short sale may be considered for a Fannie Mae backed mortgage after only 2 years. A foreclosure makes the homeowner ineligible for a minimum of 5 years.
- Lenders may consider the sale price as “paid in full” forgiving the deficiency.
- You can move forward to a brighter financial future in considerably shorter time.
Here are headlines, quotes, and statistics from large publications about the benefits of short sale instead of foreclosing on a property.
Listed below are some general themes about the positive impact of short sales.
• Short sales are more efficient than foreclosures
• Banks paying incentives for owners to short sale their property
• Damage to credit ratings not as bad compared to foreclosure
• Short sales better for the community
• Short sales better for banks
• Short sales homes sell for more than foreclosed homes
1) According to MSN Money "Banks paying homeowners to sell"
• Banks are actively encouraging delinquent homeowners to sell their homes for less than they owe, letting them walk away from the debt.
• Whats more, in some cases banks are offering delinquent homeowners cash -- typically $15,000 to $35,000 -- to do a short sale.
• Bloomberg quotes Bill Fricke, a senior credit officer for Moodys Investors Service in New York: "Banks are nudging potential sellers [to short sale their property] by preapproving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives."
• Losses for lenders are about 15% lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moodys.
(Read More at http://money.msn.com/saving-money-tips/post.aspx?post=d946d214-399b-4f00-b5e2-2b3e0d8e09c8 )
2) According to Bloomberg "Banks Paying Homeowners to Avoid Foreclosures"
• Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.
• Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices.
• Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, “My guess is they want to get rid of bad loans,” Chapman said. “If they short sale these types of loans, they have less of a headache and have some goodwill with the homeowner
(Read more at http://www.bloomberg.com/news/2012-02-07/banks-paying-homeowners-a-bonus-to-avoid-foreclosures-mortgages.html )
3) According to CNN Money "Banks pay delinquent borrowers $35,000 to sell their homes"
• From the bank's point of view, the offers make sense, according to Tom Kelly, a spokesman for Chase Mortgage, who would not comment on Pierce or other individual cases. "The first choice is a modification but if that's impossible than a short sale is a faster, more efficient solution," he said.
• Short sales also command higher prices than foreclosed homes.
• In December, foreclosed properties sold for an average of 22% less than conventional sales, while the discount for short sales was only 14%, according to the National Association of Realtors.
(Read more at http://money.cnn.com/2012/02/10/real_estate/short_sale_incentives/ )
4) According to USA TODAY "Number of Short sales on the Rise"
• Short sales are increasing as a percentage of home sales in many states, helping some neighborhoods and homeowners avoid the more devastating impacts of foreclosures.
• Short sales - when lenders allow financially strapped borrowers to sell homes for less than their unpaid mortgage - accounted for 12% of home sales nationwide in the second quarter. Thats up from 10% in the same period last year, says researcher RealtyTrac.
• The increases were sharper in some states, including California, Nevada, Michigan, Georgia and Colorado, the data show.
• Short-sale homes, which often remain occupied until sold, tend to retain values better than those that go through foreclosure. That helps values of neighboring homes. In the second quarter, short-sale homes sold at a 21% discount to non-foreclosure homes, while bank-owned homes went at a 40% discount, RealtyTrac says. Short sales may also reduce losses for loan owners because they avoid full foreclosure costs. Borrowers may qualify for new mortgages sooner after a short sale than after a foreclosure.
(Read more at http://www.usatoday.com/money/economy/housing/story/2011-08-28/Number-of-short-sales-on-the-rise/50165284/1 )
Short Sale is a good option if
- You are not eligible to refinance
- You are at risk of foreclosure
- You have tried to work a modification with your mortgage lender and failed
- You have fallen behind on your mortgage payments and cannot afford it anymore
- You are facing financial hardship and are struggling
Marshall Carrasco is a short sale expert and owner of Marshall Realty. A top producer in the Washoe area, Marshall has been successfully helping his clients to purchase and sell homes for over 14 years. Find relevant articles about short sales, foreclosure, and loan modifications at RenoHelp.org. RenoHelp.org is your one stop resource guide to find relevant articles about short sales, foreclosure, and loan modifications.
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