Benefits of a short sale and how the process works:
If you're looking to successfully complete a sale on your property through the short sale process here in Tampa, our attorneys have the experience necessary to help you maximize your profit while getting you out from underwater.
Additionally, our Tampa Short Sale Attorneys here at Fernandez Law Group will help educate you on any available options which may benefit you as a homeowner.
Seven reasons why selling your home through a short sale can benefit you:
- Sell your home or property or multiple parcels for less than you owe and in some cases, you may be able to avoid incurring deficiencies.
- A short sale will enable you to avoid foreclosure and all of its ramifications.
- You won't have to continue paying on a property that's gaining you no equity.
- You can save money doing a short sale versus other methods for getting out from underwater.
- In some cases, you may even receive money at closing.
- Short sales will allow you to get out from under your home in a way that helps your credit.
- Within 2 years of a short sale, you will be qualified to buy a new home at current market value.
There's several factors that need to be considered in order to make an informed decision on whether or not a short sale is your best option. And if your property is in Tampa, it's important to select an experienced foreclosure defense attorney in Tampa who is familiar with the courts and jurisdiction. Our attorneys have several years of experience in helping homeowners with Short Sales, Loan Modifications and other Foreclosure Defense remedies right here in Tampa.
How do I know if I qualify for a Short Sale?
There are several factors that qualify a homeowner for a short sale. Anyone who has been hit with a foreclosure notice, or anyone who has lost significant equity in their home or if their home is underwater. Basically, anyone who owns a home where more money is owed than the house is worth can qualify for a short sale.
What are some possible consequences of a Short Sale?
- You will probably receive a negative impact on your credit rating.
- Anytime you miss your mortgage payments, your credit score is going to drop. However, once you complete the short sale process, your credit will begin to repair itself very quickly and most people are able to qualify for a new mortgage within about 2 years after the short sale.
- The lender may harass you with letters and phone calls for being behind on payments.
- Once the short sale process begins, the phone calls and letters typically begin to slow down and then eventually will stop altogether once the process is completed.
- There may be possible tax implications.
- You may receive a 1099 for the amount the bank loses as a result of your short sale, however, this is usually cancelled out due to the loss that you've incurred and you may even be able to qualify for coverage under the Mortgage Forgiveness Debt Relief Act of 2007.
Homeowners typically qualify under this act if they've lived in the home for at least 2 years and it must also be their primary residence. The act allows taxpayers to exclude income from the discharge of debt on their principal residence from mortgage loans which were forgiven between 2007 through 2012.
- It is also possible there will be other deficiencies.
- Although this is very rare, we must mention it just so there aren't any surprises. In our experience, this typically occurs in less than 5% of the short sale cases we process every year. If it does occur, the homeowner might have a debt that they owe after the short sale which remains on their credit. It typically only happens if the lender sees large deposits on your bank statements before closing. You can avoid deficiency judgments completely if you participate in the government's HAFA short sale program.
- You will eventually have to move out of the home.
- Unfortunately, you will be required to move out of the home, but you'll be free from payments that aren't getting you equity and within 2 years you can attempt to get a new mortgage elsewhere.
What happens during the short sale process?
- A professional market analysis of the property will be performed.
- A confidential and personal analysis of your current financial situation is conducted.
- The property will need to be listed.
- The short sale application needs submitted.
- The homeowner will need to await approval from their lender.
- An offer submission and detailed valuation proposals need prepared and submitted.
- A negotiation process with the lender will eventually commence.
- The negotiation process of the short sale is a crucial point in the process which can make or break the desired outcome. If the negotiation is not performed correctly, the offer may not be accepted and you could even be asked to bring money at closing or incur large deficiency judgments against you and also be forced to surrender liquid assets. This is why it's very important that you use an experienced short sale attorney. Our attorneys work diligently to convince the lender that it is in their best interest to agree to the short sale.
- The lender will need to accept an offer which was negotiated and agreed to.
- If the negotiation is successful, the lender will issue the seller a short sale approval letter which states that they will accept the offer which was negotiated, and in most cases you will now be released of any liability upon closing.
- Any available government programs including HAFA should be considered and used.
- Closing with a real estate and professional title agent is coordinated.
- Any information you might need is provided to you several days in advance of the closing and you will be guided through the process by our attorneys who will help finalize the short sale process.
What documents and paperwork will I need to provide to begin the short sale process?
- A hardship letter
- The RMA / HAFA application
- A financial worksheet
- The Dodd Frank form
- 3rd party authorization
- A lender specific Short Sale application
- Proof of income
What is HAFA?
HAFA is an acronym for the Home Affordable Foreclosure Alternatives Program which was created by the government back in 2007 in order to assist homeowners who can no longer afford to keep their home. It also provides benefits to both the homeowner as well as participating servicers.
The HAFA process typically provides up to $3000 given to the homeowner at closing while fully releasing them from liability. It also helps gain pre-approval for a short sale prior to the property even being listed.
The main requirements for HAFA are that it is your primary residence and you've been there for at least 2 years.
What services does Fernandez Law Group provide me with during the short sale process?
- We conduct a detailed evaluation of your particular situation during the application process, and assist you in gathering all information required for your case.
- We perform a comparative market analysis to determine the approximate fair market value of your property in the current market and determine what, if any amount of deficiency would remain upon completion of the short sale.
- We contract a realtor in your area and submit your property for listing immediately.
- We manage offers between the homeowner, real estate agent, and lender.
- We handle all negotiations and documentation with your lender(s) to obtain approval for the short sale and options for minimizing residual deficiency liability.
- We provide title insurance for your short sale and conduct closing.
Call us today at 813-489-3222 for a FREE consultation.
Additional Foreclosure Defense Information:
Additional information about Loan Modifications:
Additional information on Short Sales:
Content authored by Gaston Fernandez
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