Florida Loan Modification, Short Sale or Foreclosure?

 

If you are among one of the many Floridians having problems with their mortgage payments, you know there will come a time when you need to think about what course of action you need to take. So before that time comes, it would work to your advantage if you have all the facts.

Florida Foreclosure

What homeowners fail to realize is that foreclosure is actually a process and not merely a term used to define the act of repossession by the lender. It is important to understand the process could take years and you should not sit back and simply do nothing. You should stop foreclosure because it will wreak havoc on your credit history and make it hard to own a home again. It could even traumatize your family especially if you suddenly find yourself being evicted.

Florida Loan Modification

For distressed homeowners suffering from temporary financial setback and would like to stay in your home, you can always consider a loan modification. But you have to understand, loan modification is not a cure to your mortgage problems. It is merely an option which will make mortgage payments a lot lighter. If you are truly in trouble and have come to terms with the fact you can no longer afford to pay your home even if your finances improve, then consider looking at another option.

Florida Short Sale

The beauty of a short sale lies on its allowing for everyone involved to come out a winner. The homeowner ends up getting rid of their debt and leaving their home on their own terms. Lenders, on the other hand, end up recovering some of their losses without having to spend much on the actual recovery, unlike with a foreclosure. It also does not leave them with another property to take care of. Of course, the buyer ends up enjoying savings and instant equity.

For obvious reasons, a Florida short sale is the best way out of your mortgage mess. To make sure you enjoy all its benefits, work with a professional Florida short sale realtor. 

Is a Florida Short Sale Right for You?

Worrying about whether or not you can continue your obligation on a home which is or nearly underwater is just natural. After all, any responsible homeowners should think about the future and what is best for everyone. Although being in such a situation could be frustrating, the good news is you can still look at the best Florida foreclosure alternative for you.

One option you should seriously consider is a Florida short sale. It is perhaps the only option which could leave you virtually debt-free and with your credit history still intact as compared to what it would look like after a foreclosure.

Of course, you might be worried about a deficiency judgment or in layman’s term, paying for the difference between the mortgage balance and the proceeds of the sale. But 2012 could be your lucky year as there is a legislation pending in Congress which could limit the amount of judgment a lender can collect.

Also you have to rely on the fact more lenders are approving Florida short sales since they cost less than a foreclosure. Some lenders such as the Bank of America even encourage distressed homeowners by offering incentives as much as $20,000 to do a short sale. Although this is very rare.

Still not convinced? Well, you should probably know a significant percentage of homes sales in 2010 were sold as a short sale. It is clear it’s becoming popular for the right reasons.

Think about it and if you do decide on doing a Florida short sale, make sure you clean up your home, find a serious buyer and prepare all your financial documents. Most importantly, work with a professional short sale Realtor who can help you determine the right short sale strategy and guide you to the finish line.

Florida Short Sale VS Florida Strategic Default

The decline in Florida home market values, due to the housing crisis, has resulted in plenty of Florida homeowners who are underwater on their mortgage. This means you owe more in mortgage compared to the current value of your home. Obviously, having negative equity is indeed frustrating and will make you consider a strategic default.

As the term suggests, strategic default means a homeowner will choose not to pay their mortgage obligations in order to force the lender to treat them as a distressed borrower. Some even go as far as walking away from their homes, thinking it is the best solution, in terms of financial practicality.

But a strategic default is not really strategic as it only gives you a temporary way out of your mortgage woes since your mortgage debt will not be cleared until the lender forecloses. You may feel guilty about not facing your problem and you will also have to suffer the negative impact on your credit history. You should know there is actually a better alternative than a strategic default— a Florida short sale.

Unlike strategic defaults, a short sale gives you the means to sell your home and clear your mortgage balance. You essentially walk away debt-free and your credit score will not be damaged as much. You may not even have to miss any mortgage payments since there are lenders who will readily approve a short sale proposal as long as all the financial documents and other requirements are in order. This is very rare though.

Of course, at the end of the day, the decision whether to do a Florida short sale or a strategic default is ultimately yours to make. Weigh all the pros and cons and try to speak with an experienced short sale Realtor to give you a clear picture of what a short sale involves.

Is 2012 the Year for Florida Short Sales?

 

The answer, obviously, is a resounding yes!

The Florida Short sale has proven time and again it is the best foreclosure alternative available especially for underwater homeowners who are having a hard time keeping up with their payments. It has less-damaging effects on your credit record and you can walk virtually debt-free. The best thing of all is, it only takes these three simple steps:

Step #1: Finding a Buyer

Considering you are under time pressure to sell your Florida home, you will need to find a buyer who is serious enough to make a reasonable offer. Of course, in order to attract the right kind of buyer, make sure you are working with an experienced short sale Realtor who can market your home and represent you professionally. It is crucial the buyer understands the need to be patient since Florida short sales usually involve a long wait. To be able to ensure a buyer stays interested is to ask for an earnest money deposit.

 

Step #2: Submitting the Florida Short Sale Proposal

Once you have secured a buyer, the next step is to submit your proposal. You have to be careful about the documents you need to submit to support your claim of financial hardship. Make sure they contain accurate, verifiable and most importantly, updated information. Again, your Florida short sale Realtor will play an important part in ensuring all requirements are in order.

Step #3: Waiting for Lender Approval

This is probably the most frustrating part of the short sale transaction, since it could take months before you hear from your lender. Try to make use of the idle time you have by preparing for the outcome. You can start looking for a home you can move into when it sells. It would also be a good idea to keep in touch with the buyer and make plans on how you would reply to the lender if the answer is a counter-offer.

These items are only a small list of short sale questions and answers. For a complete list, please contact a professional.

Top 3 Florida Short Sale Myths

It has been long been established the short sale is the best foreclosure alternative an underwater homeowner can choose. It allows you to minimize the damage to your credit score, clear your mortgage debt and most importantly, sell your home.

Of course, some Florida homeowners have become wary of short sales because of the myths perpetuated about this real estate transaction. If you want to know the real deal, you should be aware of the facts.

Myth #1: You have to be delinquent on your mortgage payments.

This myth probably came from previous practice of lenders to approve short sale applications by non-delinquent borrowers at a higher cost compared to those who have missed payment. But with many lenders realizing the practicality of approving a Florida short sale over initiating foreclosures, this is sometimes not an issue. After all, the documents accompanying the proposal are proof enough you are qualified for a short sale.  Please keep in mind though; what is the lenders motivation for approving a short sale as long as you are current with the mortgage? They can sometimes drag it out for a very long time to keep receiving your payments.

Myth #2: Walking away from your home is the same as a Florida short sale.

Choosing to walk away from your mortgage obligations will definitely prove to be one of the hardest choices you can make in your adult life. In addition to the possible tax consequence, your credit history will also suffer. You will certainly have a harder time recovering from the credit hit. You might want to seriously think about a Florida short sale if you are looking to recover from this unfortunate stage in your life much faster.

Myth #3: Florida short sales have become easier.

If you step into this transaction thinking it is simple, there is a chance you will get frustrated. You have to understand short sale remains to be a lengthy and complicated process especially without a professional short sale Realtor to guide you. From the moment you made the decision, you have to be realistic in order to be prepared for the worst. You only have to remember, although it can be difficult, the benefits are certainly worth it.

Start the New Year Right, Opt for a Boca Raton Short Sale


The beginning of each year means unlimited opportunities to make the life you have better. If having a better life entails preventing lenders from foreclosing on your Boca Raton home, then you need to consider selling via a short sale transaction.

Without a doubt, a Boca Raton short sale is the best foreclosure alternative available for any homeowner who suffers from an underwater mortgage and worried about facing foreclosure. It simultaneously addresses two things: your credit score and mortgage debt.

Choosing a Boca short sale over a foreclosure will certainly mean less damage on your credit history, allowing you to enjoy a semblance of credibility despite your financial misfortune. Meanwhile, you get to clear away your debt especially if the lender agrees not to pursue a deficiency judgment.

Although a Boca Raton short sale takes longer to process because it requires the approval of the lender, it is not as complicated as most people paint it to be. As a homeowner, you only need to comply with the requirements which usually include proof of financial difficulty, hardship letter and buyer offer.

It would also be a good idea to submit an inspection report, appraisal report and a comparative market study to show the lender the current market value of the property. The figures in these documents can also justify the buyer’s offer.

In order to keep the buyer from walking away, especially if the lender is taking too long to respond to the offer, some Boca Raton sellers require an earnest money deposit. This deposit also protects the buyer in a way as it establishes their seriousness in buying the property.

It is crucial you are ready for whatever the decision the lender hand down. A rejection does not mean the end of the world as it could only mean some of the requirements were not met. A counter offer is always a good sign since it means negotiating the final sale price. Of course, an approval is the best news of all and would certainly mean a Happy New Year for everyone involved in the transaction.

Who Benefits from a Palm Beach Gardens Short Sale?

 

Whenever “short sale” is brought up in conversation, most people would think it is a real estate transaction which only benefits the homeowner, who is looking to avoid foreclosure. But you will be surprised to learn it also benefits others.

Sellers/Homeowners: obviously, a Palm Beach Gardens short sale benefits the seller as it allows them to avoid foreclosure, which can be really traumatic. In addition, it also clears up their mortgage debt and in some cases, allows them to walk away without any liability i.e. deficiency judgment. The best news of all is their credit score will not suffer as much. It would be best to work with a Palm Beach Gardens short sale Realtor in order to ensure the short sale proposal is complete.

Buyers: Compared to buying a brand new home, a property sold via short sale is considerably cheaper. While compared with a foreclosed property, it is generally in better condition. These two reasons are enough for a buyer to consider a short sale property over other homes for sale. Of course, buyers have to be patient when it comes to waiting for the lender’s approval. But with the savings, it is worth the wait.

Lenders: more and more lenders are choosing a short sale over foreclosure for obvious reasons. For starters, it means incurring less legal costs. Surprisingly, it is also a lot quicker and does not involve the lender having to worry about evicting occupants and selling the property in a foreclosure auction. Sellers should make it easy for the lender by submitting complete proposals.

Lastly, there is also the Palm Beach Gardens community which benefits from the short sale. As you know, Palm Beach Gardens foreclosed homes are considered to be blights in a neighborhood and drag home values down. They also attract vandals and illegal squatters. By choosing to sell your home via a short sale, you are actually doing your community a favor.

Overcoming Common Florida Short Sale Problems

 

For Florida homeowners considering a short sale to avoid foreclosure, you need to know this transaction could be riddled with hurdles and challenges. The best way you can overcome these obstacles is by being aware of them and learning how to address them. Consider the following Florida short sale problems:

 

1.       Lack of Hardship – many Florida homeowners make the mistake of thinking they owe more in mortgage debt than what their home is currently worth in the market, they can easily apply for a short sale. You have to understand the lenders will want to look at your current financial status. If it remains to be the same compared to the day you got your mortgage, chances are your short sale proposal will be rejected. You need to show the lender you are no longer capable of paying your mortgage debt. This is the function of the hardship letter, wherein you write how you got into the financial mess you are in, the options you have explored to address this mess and even the outcome of your efforts.

 

2.       Multiple Loans – another Florida short sale problem would involve having several liens attached to the property’s title. Essentially, second lenders can pose a problem as they may not be willing to agree to a short sale. You have to make them realize a short sale is the only way they can recover some of their losses. It would be a good idea to discuss payment arrangements with the second lender if they don’t accept the immediate payoff. There is the option to ask the first lender to pay the second lender or pay the second lender thru the closing costs.

 

3.       Release from Liability – your Florida short sale Realtor should be clear about your position on a deficiency judgment. Your short sale proposal should contain a request for the judgment to be waived to release you from any obligation to pay the difference between the sale and the mortgage debt.