Another Virginia Short Sale Approved!

Excited for my client! She had owned this property for many years as a rental and the value had just not come back. Every month she bleed money on this rental and it caused her extreme hardship. We were able to get a full deficiency release ( which means they won’t come after her for the 100K difference between the loan amount and the sales new sales price)!

703-651-6735 Office.

6 Tips for Requesting a Short Sale

Having to sell your property or home in a short sale is a typical alternative option to keep away from foreclosure in the event that you are owing more money on your property or home than the worth of the property or home. Individuals can end up getting into mortgage payment for reasons like a financial hardship. A great approach to getting out of this financial jam is short sales. Some of the tips for requesting a short sale include

  • Know the amount you owe

When you begin this procedure, it is basic that you know the aggregate amount of any home loans or liens on the property. Your home loan lender has a portion in your home and they have to endorse the short sale.

On the off chance that your mortgages or home loans are with a similar lender, it will just require their endorsement. In any case, having two separate lenders for various home loans or mortgages relates to the fact that, a unanimous approval will be required. Once they have come to an agreement, the lender then sets the amount they will let the home be sold for.

  • Get a decent buyer

Your optimal purchaser might be somebody who will hold up quietly until your lender endorses your short sale and, when that happens, the purchaser will rapidly close the deal. These qualities are honestly hard to prescreen for, yet do as well as can be expected.

Before going into a sales contract with a potential buyer, try as much as possible to verify if such a person is capable of buying the home. You can get an approval letter, the source of down payment, credit report, etc. Do this in order not to get disappointed at the end of the day.

  • Have the appropriate documentation

Since the lender is not under any condition required to consent to your demand for a short sale, it is brilliant to assemble a proposition specifying why a short sale is the best alternative for both sides. You ought to put together all of your significant monetary records, with a letter showing reasons for your short sale request or financial hardship.

  • Adopt a proactive strategy

In spite of the dreary realities, deciding to sell in a short sale may get you out of a terrible circumstance. However, a commitment of effort and time may be required on your part. Adopting a proactive strategy to your short sale may help you escape that bad situation as fast and effortlessly as you can.

  • Information is Key

A short sale is usually a first-hand experience for most property or homeowners. However, the key to being successful is knowledge. You ought to know the upsides and downsides of a short sale, including the credit, expense, risk, and other potential outcomes.

You ought to consider whether any other options to a short sale are more appropriate and doable for your circumstance. You ought to likewise understand the general process of short sale.

  • Hire the services of a Professional

In the event that you are uncertain about how to advertise your private property for short sale, hire the services of an expert who has enough experience with cases like that and is able to guide you through.

As someone making an attempt of a short sale, you need to be at the highest point of your game. A short sale can be tedious, yet with the above tips, you have a higher chance of having a success.

5 Expert Tips for Selling Your Home

A short sale is a negotiation between you and your lender to sell your home for less than what is owed. Since you may not be an expert at negotiating with a lender. Here are a few expert tips for short selling your home:
  1. Know your mortgage balance(s)

The first thing you need to do is find out how much you owe and how much your lender is willing to forfeit. Since the lender is taking a loss, it will set the selling price of the home. If you took two mortgages from different lenders, each lender has to approve the mortgage and set the price it’s willing to accept.

  1. Put together a short sale team

When you sell your home in a short sale, you need to assemble a team of professionals to help you walk through the process. First, hire a real estate agent who specializes in short sales, then a real estate attorney and tax advisor.

  1. Prepare your documents

A short sale needs your lender’s approval. Your lender needs to see why this is the way to go. Our short sale team are skilled in short sale negotiation. Having the right team along with the right documents will set up a smooth short sale process. Generally, the bank asks for the following documents:

– Seller’s hardship letter

– Authorization letter

– Last two bank statements

– Last two tax returns

– Last two pay stubs

– Purchase contract among others.

  1. Be Patient

Standing on your agent’s neck, seeking a fast reply doesn’t help the process. Short sales take months to complete. The bank takes their time before giving a reply. Which is conceivable, since they are accepting to lose some money, it takes time to find a buyer and close the deal. So, just be patient and work with your real estate agent

  1. Expect Demands and Requests

Get ready for the worst, but expect the best. There’s a whole lot of backwards and forwards between you, your team of experts and the lending company. While dealing with a team of experts really helps to make sure your short sale package is well-organized, the lender will make additional needs and demands. Reply to and submit the information at the earliest opportunity so as not to delay the process.

So, if you’re trying to ditch a home you can’t afford or fighting a foreclosure, a short sale offers a way out. However, it won’t be a smooth ride, hence you have to prepare for everything and have a good team working for you.

Short Sale Pros & Cons

Short sales can help a homeowner out of a difficult situation, sparing him the stress and embarrassment of a long, drawn-out foreclosure process. However, there are drawbacks to the short sale process. Of course, you will lose your home – but that will still happen when the bank forecloses. You will also walk away without a penny of profit from the sale. And, your credit score will take a hit.

Typically, the perfect situation would be that you mysteriously make up for lost time with your home loan installments and keep your home. In any case, for an increasing number of Americans, that is not a reasonable plausibility, so it truly is to your advantage to play an active role. This is the thing that a short sale is about – confronting the issue, rather than just hiding from your moneylender and hoping the issue will go away or, more terrible, leaving the property.

Why Would a Lender Agree to a Short Sale?

Why might your moneylender let you walk away from the home and overlook the deficit on your credit? To spare time and cash. Foreclosures are costly and tedious for loan specialists. Once the lender understands that foreclosure is inescapable, a short sale might appear like the lesser of two evils. Also, short sales help the moneylender look great on paper – the property was never recorded as a real dispossession, which helps the lender’s numbers.

In a short sale, the lender is already concurring to take a discounted or lower payoff on the loan, should they concur to the short sale. The equity position, that is, the property owner, is in the first loss position (as he would be in the first gain position if the property had appreciated instead of losing value). Because of leverage, customarily the lender in a short sale takes a much more preponderant hit than the owner ever will.

This said, there is great liability for a dealer to attempt to cheat the bank by undercutting a home and taking any returns from the deal. A respectable real estate broker won’t partake in extortion with a customer as it at last is not in the seller’s best advantage.

As of late, many lenders have started collaborating with the Home Affordable Foreclosure Alternatives (HAFA) program. This government sponsored short sale program sets pre-approved short sale prices for any sale of properties and also approves three thousand dollars ($3, 000) in moving costs for the seller. Because this is authorized by the lender, it is permitted in a short sale.

Pros of Doing a Short Sale

  1. Avoid Foreclosure

A short sale allows the homeowner to avoid foreclosure, the legal process employed by lenders to enforce payment of a mortgage debt. The homeowner must move from home before the public foreclosure auction. A short sale allows the owner more time to sell the house and find a new spot to live.

The average legal cost to the homeowner going by way of a foreclosure is around $7, 500, according to the U. S. Congress Joint Economic Committee. Add in any additional costs that can accumulate during the sometimes lengthy foreclosure process, which could be just the tip of a hard financial iceberg. And if the homeowner struggles to afford payments, the foreclosure could eventually lead to a financial predicament where bankruptcy — having its significant credit implications for the borrower and costs with the lenders — may be the only option. Therefore, if a foreclosure is generally avoided, it’s in the best interest of everybody involved.

  1. It Can Safeguard Your Credit

From a lender’s view, it’s better to recuperate a portion of a mortgage loan than to soak up a total loss. Therefore, in lieu of a foreclosure, banks will often acknowledge a short sale. This allows the lender and homeowner to end up in a better position.

One concern for many homeowners, however, is whether the financial institution will sue for a deficiency judgment just after the short sale. In an attempt to recover the difference in the amount that was initially paid and the sum of the loan, the bank can file case against the homeowner. A deficiency judgment will appear on a homeowner’s credit report and have a damaging impact, just as a foreclosure would.

But rather than endure a pricey and time-consuming litigation process, a bank will cut its losses with homeowners who are unable to pay their mortgages as a result of proven hardship, such as the divorce or decrease in income. And the reduced cost owed will ease the burden on the homeowners and not irreparably damage their credit.

  1. It Can Offer the Seller Relief

Real estate sales generate a flutter of activity relating to the buyer and the seller, and they’re often stressful of course. But they don’t compare to the pressure that a homeowner is under a foreclosure. The major credit hit, the drawn-out legalities and the general stigma connected to foreclosure is usually quite unnerving.

Short sales are not exactly risk-free on the subject of the seller’s credit rating, and they will not completely diminish this financial implication when homeowners cannot pay for a house that they purchased. But the sale will open the entryway to solutions for homeowners which may allow them avoid legal action plus the lengthy, laborious foreclosure process.

Cons of Doing a Short Sale

  1. Financial implications

Lenders may consider getting a deficiency after a short sale in some states. The collateral amount sold is determined by the difference between the balance of the mortgage loan and the price of the property. The borrower may be liable for taxes by the IRS, on the amount forgiven by the lender.

  1. Selling Obligations

The homeowner must list the home available and find a buyer to accomplish a short purchase. Some lenders require a real estate agent be used for the sale. The short sale application involves the seller providing the lender with solid proof, such as the borrower’s pay stubs and proof of hardship. A seller who has a high-paying job or assets might have a harder time carrying out a short sale with a lender.

  1. Bank is in the Driver’s Seat

When you offer a house in the standard way, you give orders. You set the listing value, you negotiate offers, you accept or dismiss a deal. In a short sale, you are only one player- – and not an essential one at that. In a short sale, the dealer puts the house available to be purchased and signs the business contract, yet it is truly the moneylender that chooses whether or not a short sale can continue, sets the time span and negotiates the price.

Foreclosure vs. Short Sale

There exists a lot of misunderstandings about foreclosures and short sales. Which should you use and why? Will your credit score be impacted just the same way by both of them?

When you buy a house, you typically make a deposit and then set up a mortgage amortized over a number of years. The house is used as collateral and if the homeowner is unable to make monthly mortgage payments, the credit institution has the right to seize the property in order to recoup their losses.

Now let’s compare these two options:

What is a Foreclosure?

Foreclosure is the means by which a lender gets title to a property because of homeowner’s loan default. The lender recoups their own loan investment by simply selling it at the trustee sale. If there are usually no other potential buyers, the bank takes the exact property into inventory as real estate owned (REO). Banks are not in the business of property proprietorship nor management, and they are legally obligated to sell off these kinds of non-performing assets.

What is a Short Sale?

On the other hand, short sales are properties sold before foreclosure at a discount for the reason that current market value is lesser than the loan amount. The homeowner still has the title but the sale must be endorsed by the bank, who endures a capital loss upon sale. To keep away from the extra cost of the foreclosure process, banks are willing to sell properties at or below market value.

Foreclosure Facts

According to Re/Max, the average price of foreclosed houses was $185, 000 while that of other regular properties was $267, 300 in May 2011. In addition to prices, bank owned properties can be bought much more quickly over a typical short sale made.

Despite the low price, bank owned properties have their share of problems. These foreclosed properties typically sit vacant for weeks or even months, lack regular maintenance, attract squatters as well as copper thieves and need repairs. Most banks promote their foreclosed properties in an “as is” condition. So, anyone who will buy must find what repairs are essential and invest money and time to fix those difficulties.

Short Sale Facts

This type of distressed property is in relatively better condition, and often repairs are not necessary. Since properties are still occupied by homeowners, the house is usually maintained. Roughly 80% of these properties are of good quality.

However, short sales have their drawbacks. This type of foreclosure may take a long process, requiring months to complete. You need to be qualified and have a much longer time horizon to buy the property. Reason for the long process is that all pledgees must approve the sale. But, the short sale process can be sped up if the seller’s agent is experienced in negotiating with the bank and closing short sales.

Foreclosure Process

Depending on the state a borrower lives in, foreclosure may or may not involve the judicial system. Following three to six months of missed installments, a loan specialist will record a notification of default, which informs a borrower that he is confronting foreclosure and gives him a reestablishment period to make things right by paying off obligations or settling any dispute. The length of the reinstatement period changes by state, with a few states giving borrowers a negligible five days to settle disputes and obligations and others giving up to 90 days.

If the home loan’s unpaid balance is not paid off within three months, the mortgage holder gets a notification of sale. The property is then sold at a trustee sale to the highest bidder, who must pay in real money inside of 24 hours. The opening offer is generally equivalent to the outstanding balance and any extra lawyer charges the bank might have incurred.

Short Sale Process

When the market value of the property is less than the outstanding mortgage principal, and the borrower cannot afford to pay the loan, the lender (one or more banks) can choose to accept a short sale. In a short sale, the proceeds from sale of the property falls short of the mortgage balance, which is one reason lenders may hesitate to accept the offer for a short sale. Any unpaid balance owed to the lenders after a short sale takes place is known as a deficiency. Short sale agreements are not necessarily borrowers releasing themselves from their obligations to repay any shortcomings of the loans unless explicitly agreed between the parties.

Distinctions Between Short Sale & Foreclosure

  1. For borrowers: The current government is actively trying to halt the tide of foreclosures in the United States. For this purpose they began the MHA program, which stands for Making Homes Affordable and is an attempt to reduce the mortgage payments on both primary and secondary mortgages. The hope is that more people are able to stay in their homes will be.Those borrowers who are still unable to keep their homes, even with the help of the MHA program can use a short sale as a way to get out from under their obligations to the lender. If this was the primary residence of the homeowner, they are not liable for taxes on the forgiven debt, and may even be eligible for a $ 1,500 to help pay for moving expenses.
  2. For Lenders: Lenders participating in the MHA program are required to reduce the mortgage payments in an effort to make payments affordable. Under this program, lenders can also get up to $ 1,000 in incentives, even without loan modification. To make this possible, the lender must allow a short sale if the borrower prefers this option.
  3. Credit Scores: Neither foreclosures nor short sales offer an advantage over the other in terms of the negative influence on a person’s credit score. Industry experts along with Freddie Mac and Fannie Mae say that this decline in credit ratings will be between 200 and 300 points.
  4. Waiting time between mortgages: Freddie Mac and Fannie Mae guidelines stipulate that a borrower must wait for 5 years before qualifying for any new mortgage following a foreclosure. In the case of a short sale, the waiting period for a new mortgage is merely 2 years.


As a homeowner, if you qualify for aid that will lower your payments, maybe you will be able to avoid a foreclosure. If not, trying to work out a short sale with your lender probably is your best bet.

From the lenders standpoint a short sale might be best because foreclosures might be both costly and time intensive. Ultimately the impact of your foreclosure to your credit rating and ability to borrow later on is reason to choose the short sale above the foreclosure. Lenders will look more favorably on the borrower that tried to cooperate with the bank (via short sale) than one who just walked away.


Sample Hardship Letter for a Mortgage Loan Modification

Are you behind on your mortgage? If you do not think you’ll be able to get under the current terms of your mortgage, but you are willing and able to be make payments, you might want to consider applying for a loan modification from your lender. If so, you need to write and submit a hardship letter with information about the circumstances that led to the current financial situation combined with a request to consider other loan terms.

Through a mortgage hardship letter, debtors inform creditors that they’re unable to make their mortgage payments. This letter describes the occasion or motive for their incapability, examples of which include being recalled to active navy duty, dying of a co-borrower, divorce, assets damage, activity loss or illness. In the letter, the borrower can also request a loan modification, payment abatement period or some other kind of relief.

By and large, it takes after the arrangement of an essential business letter: introduction, descriptive paragraphs plus a conclusion. The distinction is that, in the conclusion, the borrower makes a solicitation. It is written, marked and dated by the borrower, and should not be emailed. It is sent to the bank or home loan moneylender and turns out to be a piece of the borrower’s record upon receipt. Ideally, to guarantee that the letter is appropriately reviewed, it ought to be sent to a particular loan administrator and not to the general attention of the bank. It should also be dispatched to the existing loan management office and not a bank branch or other place.

Common hardships that financial institutions usually find acceptable:

  1. Loss of employment
  2. Lower Income
  3. Death or Illness (of the homeowner or family member)
  4. Divorce or Separation
  5. Flexible Rate Reset-Payment Shock

Everyone experiences issues in life, and they usually are not your fault. For example, no individual homeowner may very well be blamed for the particular nationwide banking crisis, recession, or housing bubble that this country experienced. These issues have far-reaching consequences and have placed many homeowners in a difficult position.

If you’ve been laid off from your job caused by forces beyond your current control, that is not your fault. Many hard-working, loyal employees lost their jobs at companies they worked in for years due to reasons unrelated to their job performance.

Property holders have missed work on the grounds that they were lamenting the passing of a relative, or they were getting treatment for a physical or emotional sickness. Notwithstanding the money related expenses of managing these occasions, the time far from work means lost wage. Cash is lost going and coming, and it’s no big surprise that individuals encountering these hardships can fall behind on their home loan. The uplifting news is that your home loan bank can take the issues you’ve had into thought while assessing you for a loan modification.

The reason for your hardship is not the bank’s essential concern. What’s imperative to the bank is that the hardship is over, or will be over when they change your loan. They need to see that the issues that made you cause harm have been determined, that you’re in a position to get back on track, and that you merit better terms.

It is worth noting that the hardship letter is just one of the required items in your loan modification application, and you may be refused for many reasons. The best letter in the world does not guarantee success, but it is a necessary piece of the puzzle, and can help the bank to see you as a real person rather than an anonymous name that owes them money.

If you would like to write your hardship letter yourself, it’s important to avoid common mistakes it is important to common mistakes, like writing too much, or failing to comprehend the bank’s point of view.
Whether you need to write your hardship letter on your own or not, still consider consulting with an experienced attorney to assist you through the loan modification application process. Although getting a loan modification approval is never a guarantee, you can increase your odds by working with a lawyer that understands the process and has a proven track record. Utilizing the services of a foreclosure defense law firm will allow you to present your best self to the bank, and frees you to recover from your hardship and work on improving your situation.

Remember, a real, legitimate, and genuine articulation demonstrating your purpose behind the asked for loan modification, deed in lieu, or a short sale is the best. Property holders can likewise check their qualification for the HAFA Short Sale including the $3,000 Seller Relocation Assistance before writing the Hardship Letter. Utilize the free Sample Hardship Letter guide to offer you some assistance with overcoming writers’ block and compose a successful Hardship Letter however never manufacture a Hardship Letter that is not totally reflective of your individual circumstance or duplicate somebody else’s Hardship Letter.

While there isn’t guarantee that your request will be granted, lenders are often willing to do business with borrowers who are proactive in seeking modifications as opposed to allowing outstanding financial loans to fall additionally behind and shift toward foreclosure. You may uncover (as do many) that this banker is willing to do business with you to maintain your home.

Disclaimer: Readers with credit, legal and tax questions are advised to seek the advice of an attorney or tax advisor. The above information should not be construed as legal or tax advice.

Download a free loan modification hardship letter guide here at:  You may need to fill in your name, email and state before you download

PS: You can download and upload to your site, citing reference, whatever works…