Austin Texas – If you are getting divorced and neither of you can afford the house on your own, I would of course recommend you sell the house. Now, if you are reading this Blog, then you may be researching a Short Sale; which means that you may be upside down in the home. You have three options if that is the case.
Option #1: Let your lender foreclose on the home. You just stop making the payments and surrender the home to your lender via Foreclosure or Deed-in-Lieu of Foreclosure (that is if your lender will go for a Deed-in-Lieu, which is highly unlikely).
Option #2: Short Sale the house and get the debt wiped out. A short sale offers the following benefits over a foreclosure.
Issue: How soon can I get a Loan again?
Foreclosure: The current Fannie Mae Guidelines require you to wait 4 to 7 years (depending on your down payment size) before you can buy another home with a Fannie Mae Loan if you are foreclosed on. Most other banks and lenders have the same or even stricter procedures. If your lender filed a deficiency judgment against you after the foreclosure, then you will have resolve that judgement first before getting another loan. And that could be tough if the judgement is substantial.
Short Sale: If you are back on your financial feet, you could qualify for a Fannie loan only 2 years after a short sale. FHA has a program whereby you may only need to wait 1 year after the short sale in order to do an FHA loan (certain conditions apply).
Issue: What will I have to disclose on future loan applications?
Foreclosure: Most future credit applications will require you to answer the standard question, “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” you’ll have to answer that question Yes.
Short Sale: You can state “No” to the standard foreclosure question because you short sold your home. You only have to say yes if the bank completes the foreclosure.
Issue: Credit Score Impact.
Foreclosure: Your score is typically lowered by 300+ points or more. Foreclosure often impacts your credit score for about 3+ years or so.
Short Sale: Only the late payments show up on your credit report. After a short sale, the mortgage is normally reported as “paid in full, settled, or paid as agreed.” This has a modest effect on your credit score if all your other payments are being made on time. Often your credit score is back to normal in as little as 12 months after a short sale.
Issue: Will I owe the bank any money for the shortfall?
Foreclosure: Many lenders take 12 to 24 months to foreclose a property, clean the title, and then resell it (total start to finish time frame). This dramatically increases their loss and makes any deficiency judgment they will file against you in the future potentially bigger. And the deficiency judgment can haunt you for many years. In Texas this judgement can follow you around for as long as 10 years if your bank is pro-active about re-filing it every two years (and most do).
Short Sale: Lenders will not file a deficiency judgment against you in a short sale situation, nor do they normally ask for a promissory note on a short sale either. The shortfall and debt are normally just wiped clean off your credit report(s).
Option #3: Rent the property. If you are upside down, then it is likely that the rent will not cover the mortgage, taxes, insurance, and expenses. That means someone will have to write a check each month covering the rent loss and/or short-fall.
Thinking about doing a Bank Short Sale to avoid Foreclosure? Or thinking about Buying a Bank Short Sale?
I can help you short sale your property and get back on your feet. I can also help you buy a short sale. Send me an e-mail at GeorgeKiefer@gmail.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (512) 970-0709
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Austin loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.
Thanks for reading this, George Kiefer, GRI, CDPE, Broker.
George Kiefer holds the CDPE designation (Certified Distressed Property Expert).
George Kiefer is a Real Estate Agent and Broker-Associate at Keller Williams Realty in Austin Texas.
Austin Short Sale REALTOR: George Kiefer Phone: (512) 970-0709 GeorgeKiefer@gmail.com
Assisting Homeowners in Distress
View My homes for sale at www.GeorgeKieferAustin.com.
George Kiefer specializes in loan modification assistance and short sales in Austin Texas. Austin Loan Modification Help, Austin Short Sales. Austin Short Sale Realtor Austin Texas Short Sales. Austin Realtor.
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George Kiefer, Keller Williams Realty, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why?
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.
The views expressed here are George’s personal views and do not reflect the views of Keller Williams Realty.
This information on Austin short Sales and Foreclosure is provided as a courtesy to our viewers to help them make informed decisions.
For a free list of foreclosure property with full addresses and color photos visit www.AustinForeclosureSales.com