Based on records, the number of Lee County deficiency judgments is certainly rising. Last August, there were 51 judgments recorded compared to 32 in July. For the first eight months of the year, deficiency judgments filed have already reached 179.

According to the Florida Real Estate Investors Association, the numbers can be expected to rise even higher as foreclosure filings slow down and lenders have more time to look into these judgments, which is in their legal right to do so.

With the foreclosure rate still high nationally, a lot of real estate experts believe the next wave will involve debt collectors and investors going after borrowers. At present, these people are already buying deficiency judgments for very low prices.

In order to avoid a deficiency judgment, experts are recommending homeowners to fight foreclosure with everything they got. One option is a Lee County short sale. With the right short sale Realtor working with you, it is entirely possible for your lender to forgive your mortgage debt especially if you have stated a strong case. Even if the lender chooses to go after the homeowner with a deficiency judgment, it will not be the same since it was a short sale and not a foreclosure.

In Florida, lenders are given one year to file for a deficiency judgment after repossessing a property. Most often than not, the smaller banks are the ones more aggressive when it comes to getting these judgments.

http://www.naplesnews.com/news/2010/sep/01/foreclosure-deficiency-judgments-rise-lee-county/?comments_id=822791

In real estate, you can actually sell your home for an amount less than what you owe in mortgage. The best thing of all is that this sale is lender approved and there is even a big chance you will not need to pay the difference and your entire mortgage debt may be forgiven. If you are wondering why lenders do this, the answer is simple. They know, from a business standpoint, they could lose less compared to a foreclosure.

Win-Win Situation for All

If you look at how a short sale transaction is set up, you will realize that everybody comes out a winner. As mentioned earlier, sellers and lenders will find a short sale to be logical. For buyers it is the same thing. No one can argue that buyers of short sale properties get to enjoy owning a home at a significantly reduced price. This is because you can take into consideration the current value of the home and the mortgage debt and make an offer which the seller and the lender cannot resist. To shorten the transaction, buyers should come armed with complete documentation to prove their financial credibility and their offer is more than sufficient and reasonable.

Safeguard Your Interest

Just like any foreclosure alternative, there are certainly negative consequences to a short sale. But to minimize or lessen the impact, you should take the following steps:

1. Get Everything in Writing – Be sure that all agreements are documented and signed in order to prevent any miscommunication or misunderstanding. In particular, you should clarify with the lender the elimination of your entire debt. In many cases, a lender agrees to not file a deficiency judgment and make sure such promise is in black and white. This may not be available in all circumstances.
2. Protect Credit Score – You can ask your lender how they would report the short sale transaction. There are instances when a lender will simply put down “debt is satisfied”. While there are times when they would indicate “settled for less than amount owed”, which could make a negative impact on your score.
3. Get Professional Assistance – A short sale can become quite technical and you would need the help of a team of professionals which include a tax lawyer and a short sale Realtor.

The mortgage financing giant announced last June its new policies involving homeowners who choose to walk away from their mortgage obligations instead of working with their lenders to come up with a solution to prevent foreclosure. The said homeowners, who are actually capable of paying their mortgage balance or decided to default on their workout alternative, will no longer be eligible for a mortgage loan backed by Fannie Mae. The ban will be for seven years from the foreclosure date.

According to Fannie Mae, the new policies were put in place to stress the value of working with your lenders and discouraging strategic defaults. When a borrower walks away, it will not only bad for him or her but also for the community. On the other hand, distressed borrowers who make an effort to stop foreclosure and work with their lenders will more likely be considered for a Fannie Mae mortgage loan at a shorter time.

Aside from the loan ban, borrowers who choose a strategic default will also face legal suits for deficiency judgments. Last July, Fannie Mae instructed servicers to monitor delinquencies and recommend borrowers who deserve to be pursued for deficiency judgments. Distressed homeowners are actually being encouraged to look at several options or foreclosure alternatives such as deed in lieu of foreclosure, loan modification and short sale.

If you have an underwater mortgage, meaning you owe more in mortgage than the value of your home, and no longer capable of paying your monthly mortgage dues, then a Florida short sale is the logical option. It will result to less damage to your credit rating and your entire mortgage debt could be eliminated, if your lender decides to forgive the balance.

http://www.fanniemae.com/newsreleases/2010/5071.jhtml?p=Media&s=News+Releases

Since one of the key components of a short sale involves finding a buyer, you should expect tough competition. The only way to attract buyer interest is by using effective tactics such as:

1. Staging your home – Many distressed homeowners fail to see the importance of making their homes presentable, thinking their unfortunate situation will excuse them from not making any effort. You have to put yourself in the buyer’s shoes and look at your home through their eyes. Remove clutter, paint the walls, trim the hedges, fix windows and doors, update your kitchen and if you can, strip the wallpaper. You will be surprised at how much more attractive your home will look by doing these things and you need not even spend much.

2. Being available at all times – Among the things buyers hate the most is difficulties reaching the seller. You should be available to answer questions and accommodate drop-ins. Of course, setting up an open house will make you better prepared but you can never tell when a buyer will suddenly appear and make an offer you cannot resist.

3. Being open to negotiations – You have to remember it is a buyer’s market, meaning buyers have the upper hand. You should always have wiggle room when deciding on a list price, for example. This is also applicable to the other sales details. Do not be too quick to say no especially if what the buyer is asking sounds reasonable.

4. Doing research – Potential buyers are more likely to make an offer if you know what you are talking about. Do not leave everything to your Realtor since there would be instances when the buyer would direct the question to you. Know as much as you can about your home, your community and even the current market conditions. This will surely impress the buyer and help him make an informed decision.

5. Work with Everyone – Although you might think your Florida short sale Realtor is the only one on your side, you should still make an effort to be accommodating to every person involved in the process including the lender, appraisers, lawyers, inspectors, etc.

Agent / Realtor – It would only be natural for you to hire someone who will help you with this complicated transaction. You need to be cautious since there are people who will take advantage of your situation. To be sure, you should only work with licensed Realtors and ask for references. You can also choose to interview several agents before you decide to work with one. Asking your friends and family for a referral is also a smart idea since they will most likely refer you to someone they trust themselves. Be careful about scammers and fraudulent offers. If what they are promising is too good to be true, it most probably is.

Lender – Although there are lenders who will be kind enough to help you, you have to keep in mind that they are only after one thing: their money. So every agreement or negotiation detail you have with your lender should be in black and white and documented. Be professional in dealing with them. After all, for them it is purely business.

Buyer – Dealing with buyers can be tricky since they can get tired of waiting for the lender approval and disappear. Also, there are cases when the proposal is about to be submitted and you discover that the buyer is actually not capable of buying your home. Again, you need to do due diligence. Make sure you check if the buyer is legitimate. This way, you can avoid wasting time and accept other offers.

A short sale is indeed an effective way to stop foreclosure but, you have to be involved even if you have a Realtor working with you. After all, it is your home and your future which is on the line here.

1. It is embarrassing to list your home as a short sale. At this point in your life, you need to overcome feelings of embarrassment especially if you know your decision will benefit you better at the end of the day. You should realize that by doing this you are actually protecting your financial future.

2. There are few buyers interested in short sale. You have to realize that buyers would rather look at a property which has not fallen into neglect. Although a short sale transaction can be a lengthy process, it only takes a good short sale Realtor to explain to the buyer what is involved and give reassurance at the same time.

3. Time is too short for a short sale. The only way you can say this is if you actually tried to short sell your home. What is important is for you to start the process and with the right negotiation; you might just be able to stop foreclosure in the nick of time. Again, the key is to take action at once!

4. Short sales are usually not approved. If you read the newspaper or listen to the news, you should know short sales are fast becoming the option for underwater homeowners especially in states hit hardest by the mortgage meltdown. Their popularity is based on the fact that they are very effective in preventing foreclosure. To improve your chances, hire a team of short sale professionals.

· Fear of their friends and neighbors knowing
· Denial of their mortgage situation
· Thinking their lender will have compassion
· Hoping their financial situation will improve

If you still want to get out of this mess with less damage to your credit, you should consider looking for expert short sale help. Before you do, consider doing the following:

· Contact your lender – At the slightest hint of a mortgage problem, you should speak with your lender immediately. Your lender is actually the first one you need to talk to, to determine what options are available to you. If they discover you can no longer afford to pay your mortgage they might even suggest a short sale. You should not be surprised considering most lenders these days are open to short sale instead of a foreclosure mainly because they no longer need to have another home added to their inventory of non-performing assets.

· Prove Your Financial Situation – It is crucial to have documents ready which will prove your hardship. No lender would speak to a borrower who simply claims they are qualified for a short sale without proper documentation. Prepare your income tax returns, bank statements, list of assets and liabilities and other proof of income and make sure they can withstand the intense scrutiny of your lender.

Considering the complicated process of a short sale transaction, having a professional and expert will help speed things along. Also, your short sale Realtor will be able to provide you with sound advice regarding pricing your home, accepting an offer, making a counter offer or negotiating with the lender. These things are crucial to the success of the short sale and you would not want to make a mistake you might regret later on. All it takes is to admit you need short sale help, and you can move on from there.

Before you choose which option will benefit you most in the long run, you need to take the first three steps which can certainly prevent foreclosure.

Step 1: Accept Your Situation –There is nothing more powerful than facing your problems head on. If you acknowledge your situation, you will likely be open to more ideas, solutions and suggestions. On the other hand, if you deny you have a problem, you will have a tough time coming up with a solution because you do not want to think you are in trouble and will surely find it difficult to look at possible answers.

Step 2: Hire Professional Help – As soon as you acknowledge you have a problem, you will benefit from hiring a professional such as a short sale Realtor. These experts certainly have the know-how, experience and skills required to increase your chances of getting out of this mess with less bruises and scratches. By working with a professional, you can be sure time will not be wasted and you will also understand what is happening, allowing you to make quick yet informed decisions.

Step 3: Take Action – After drafting your options, together with your Realtor, you will have to move as quickly as possible. Again, you are racing against time and you need to work hard and give your best to stop foreclosure. If you dilly-dally or wait for things to get better, you might lose the one opportunity you have to stop foreclosure in Florida.

Being underwater is not so bad as long as you can manage the mortgage payments and wait until the worst of the housing crisis is over. On the other hand, if your livelihood has been adversely affected by what is happening in the economy and you find yourself owing more than what your home is currently valued at, it is probably the best time to look at options — particularly, if you want to avoid foreclosure at all cost.

A lot of real estate gurus would tell you to scrutinize your finances, speak with your lender and look at the different options available. Although all these things are necessary, nothing is more important than finding a trustworthy Florida short sale Realtor who will work with you each step of the way.

Benefits of Working with a Professional

Most homeowners think hiring an agent is simply a waste. But if you consider the following advantages, you will see why working with a short sale expert is the right decision to make.

In Depth Knowledge of the Process – Nothing is better than having someone beside you who knows what is needed to be done and what is happening. Remember, a short sale is a lengthy and complicated process and if you think about the fact you are on the clock to stop foreclosure, you should realize you need all the professional help you can get.

Ability to Handle Problems – As mentioned, a short sale usually comes with challenges such as finding a buyer, preparing the proposal, gathering all the necessary documents and even negotiation with the lender. If you have a Realtor who has the experience and skill to tackle each obstacle as well as make sure everything is prepared and planned accordingly to avoid delays, then you are definitely in good hands.

Understands Your Situation – The biggest perk of having a Florida short sale Realtor working with you is having someone who knows exactly what you are going through and will try hard to make sure you get out of such mess with the least damage. Considering that facing foreclosure is already a traumatic experience, having someone who will hold your hand and guide you is surely something priceless.

To complete a short sale, you will only need to remember three important things:

1. You Must Be Able to Prove Hardship – In the first place, the reason why the bank will agree to accept a short sale is because of your financial situation. You must be able to prove you are no longer capable of meeting your mortgage obligations by providing documents such as income tax returns, W2 forms, bank statements, unemployment compensation and list of all assets and liabilities. Of course, there is also the hardship letter which summarizes your present finances.

2. You Must Give the Lender a Valid/Reasonable Offer – Proving you are having financial difficulties is not enough. Most lenders will only acknowledge your short sale proposal if it comes with a signed sales contract as well as proof of buyer financing.

3. You Must Have a Good Short Sale Realtor – It is very crucial you have a good short sale Realtor at your side to check whether you have submitted the right documents. Aside from this, your agent will also be responsible for dealing with the buyer, making sure the process is understood. A good Realtor should realize the importance of his role in making the proposal a success. He or she should always be available to answer all questions, whether asked by you, the lender or buyer. Your Realtor should be able to follow up and check the status of the proposal regularly in order to avoid any problems or issues from blowing out of proportion.

The waiting period is obviously the most difficult part and you should be very patient. If you have done your homework and made sure the buyer understands his or her as well, then you have nothing to be worried about, especially if you have an expert in short sales in Florida beside you.