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The topic for the day is Short Sales and hardship! Read the text below and be more informed! We welcome your comments.
With several homeowners upside down on their homes, we’re starting to see more homeowners becoming strategic defaulters on their loans. What does this mean? This simply means that homeowners who do not have a true hardship such as loss of job, loss of income, or any sort of financial hardship are selling their homes for less than what they owe by doing a short sale. Many people are asking how can this be done? First off, we’re not saying that strategic default is right or wrong. We’re just stating that it is happening out there. Most people believe that there must be a valid hardship for the homeowner to complete a short sale, but my question to all of you is this? Who has the hardship when the homeowner/borrower stops paying the bank or lender? THE BANK OR LENDER DOES!!! The bank or lender is the one that is receiving the money from the borrower and when that payment stops coming in who suffers? THE BANK DOES! Here is another example of passing on a hardship to another party. My friend Joe owns a condo as a rental property. He rents it out to Lisa for $1,400.00. Lisa stops paying Joe. Who suffers?JOE DOES! So when a homeowner current on payments with no valid hardship decides to stop making payments, it becomes the banks problem. Of course the bank has three options at this point. They could let the homeowner live in the home for free, foreclose, or approve the short sale! Now the bank has a hardship because they are not going to let the homeowner live in the home for free so they are narrowed down to options two and three. Foreclosure or short sale and we all know that it is savings over foreclosure. A short sale would be a better choice for a bank because they will save MONEY over foreclosing. Like we mentioned earlier, we’re not saying that this is right or wrong. We’re just showing how a bank would end up having the hardship.
WATCH FOR SCAMS
Again we must remind everyone to please beware of SCAMS out there. With the number of people struggling with their mortgages and without jobs there’s always those sharks looking to take advantage of the situation. If it sounds to good to be true, it probably is!! NEVER give anyone any money up front to help you with your loan modification. Stay away from the Forensic Audits as well as the Check for Securities. These are not exactly scams but the chance that either one of these being helpful is less than 5% and cost $3000 to $5000.
Realtor commissions for short selling your home should be FREE to the homeowner. It should be negotiated with the lender to pay the commissions.
Please contact us for a FREE consultation and we’ll help you explore your options. There are always solutions and we really want to help you find one.
Have a Great Day!
