• Why should I Short Sale my home?
• How much does it cost me?
• Should I pay a company for a loan modification?
• What are my options?
• Can I qualify without being behind?
• How does a Short Sale impact my credit?
• When will I be able to buy another home?
• How long will the process take?
• Why would the bank accept my Short Sale?
• Does the bank reduce principle amounts owed instead of foreclosing?
• Who wins in a Short Sale?
• Important Links

Why should I Short Sale my home?
A Short Sale is tough, but it is definitely better than a foreclosure for more than just financial reasons.  A foreclosure can cause severe stress on a family and should never be looked at as an easy decision.  In this area, there are many jobs that require security clearances which will be in jeopardy with a foreclosure on your record.  Use the link to the right to download a fact sheet on a Foreclosure vs. a Short Sale to see what other implications a foreclosure can have on your record.  A Short Sale is a viable solution and a way of avoiding the stress that losing your home can have upon your mental health.


How much does it cost me?
Nothing...and anyone who charges you anything is taking advantage of your situation.  There are too many HUD counseling services out there to help with loan modifications if you end up qualifying for one.  These companies that offer services where you do not have to pay unless they win are simply taking advantage of todays market situations.  Any agent that wants to charge you to list your home should be questioned since other agents like our team do not charge for these services.  HUD put together a list of tips to help avoid foreclosure - the number 9 tip is to avoid foreclosure prevention companies since


Should I pay a company for a loan modification?
NO - The fact is that most lenders have notified the loans that they feel can be adjusted and have started the process of working out a plan with the homeowner.  Just like in every economy, you have companies that seem to specialize in whatever the trouble of the day is - Credit Card Debt, Loan Modification, Back Taxes, etc.  Banks are not lowering principles on loan balances, and are only adjusting loans to their original interest rate, or as a short term fix.  Any company asking for money up front is not working in your best interest.  Use the link on the right to find housing counselors in your state.  The difference between these companies and ourselves is that we facilitate the sale of your home without any cost to you.  It is a real life occurrence - there were over 175 Short Sales listed in Prince William County from June 1-15 this year alone.


What are my options?
The first thing we have to do is evaluate your situation.  If you are already behind, we have to make sure that the foreclosure is stayed and that we can get time to sell your home.  If you are in a situation where you are being forced to move, then we have to contact the lender to see what their Short Sale process is.  If you are not being forced to move, but are having problems paying your mortgage, we will first find out if there are modifications that we can make with your lender to lower your monthly payments.  There are plans in place that can help "catch you up" so that you can stay in your home, but if the monthly mortgage is the problem then either a loan modification or Short Sale is your best option.


Can I qualify without being behind?
Yes - the Home Stabilization Act of 2009 states that your lender has to speak with you even if you are not behind on your mortgage.  Before, you needed to be delinquent before they would talk with you.  In every Short Sale scenario, a monthly budget will be prepared to show what your monthly income is vs. expenses.  This will show the lender that even though you are not behind, your current financial path will get you behind relatively soon.


How does a Short Sale impact my credit?
This depends on if you paid your mortgages on time.  If you have missed payments, then that impacts your credit the same as if you were not in a financial hardship.  A foreclosure will lower your credit score anywhere from 200-400 points and last for up to 7 years.  An Agent who knows what they are doing can negotiate a Short Sale in which the lender agrees that you have satisfied their requirements.  This will have a minimal impact on your credit score.


When will I be able to buy another home?
If you are having a Short Sale on a a FANNIE or FREDDIE held mortgage, then you will have to wait 2 years before they will accept a loan on your behalf.  Again, all other lenders will evaluate your loan application based on income and current credit score - which will be determined by how your Short Sale is negotiated.


How long will the process take?
Short Sales typically take about 3 months once a package is submitted to the the bank.  The better the short sale package, the faster the turnaround will be.  This also depends on the bank.  Some banks are very easy to work with, and some are extremely difficult.  A good estimate is that from the time we meet to settlement will be about 3 months.


Why would the bank accept my Short Sale?
It is a bottom line issue with the banks.  When you factor in the costs that are associated with actually foreclosing on a home, the lender may be more interested in letting the home be sold in a Short Sale rather than spend the additional $to foreclose.  They have lender fees, eviction costs, holding costs, agent fees, as well as the length it takes to close the transaction.  Short Sales are selling at about the same value as foreclosures, so by eliminating all the extra costs it actually makes sense to simply accept a Short Sale. 


Does the bank reduce principle amounts owed instead of foreclosing?
Few and far between.  The legislation that was enacted to help homeowners refinance was very poor in it's construction.  It only allowed for you to refinance if you owed 105% or less of the property's value.  Most homes are upside down 20% or more.  The loan modifications that we have seen all relate to an adjustment of the interest rate back to a % that it was originally qualified for.  There is no incentive for the banks to lower the principle owed on the property.


Who wins in a Short Sale?
Everyone - the homeowner avoids their home being taken from them, the banks get to avoid higher than normal loan losses as well as the expenses of taking over a foreclosure, and the buyer gets to purchase a home at a bit of a discount but in better repair than a home that has been foreclosed on.

Important Links

Making Home Affordable Program
Foreclosure vs. Short Sale
Why Should I Short Sale
Foreclosure Avoidance Counseling
Loan Modification Questions