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Write Strong Hardship Letters For Short Sales

daka — Fri, 25 Dec 2009 07:22:54 +0000

When homeowners are faced with selling their homes on short notice to avoid foreclosure, their first task is to write a hardship letter to the lender. While this is a very emotional time for most people, getting all the facts is what the banker or lending professional is concerned about. They realize that your decision to sell your home at a loss was not an easy one, but they need concrete reasons why they should participate in the short sale process. While writing, keep the emotions out of it. After all, it’s just business, as Mr. Trump would say.

There are several variations on styles of hardship letters, but at the very least, the content should contain some basic information. It can be hand written or typed, but it should be as professional as possible. If you have reached this unfortunate position, here are some steps to help guide you through the sometimes overwhelming process:

1. Find the name of the exact person at your bank or lender’s office that handles short sales. This means the actual person that makes the decisions, not the administrative assistant that will forward your letter to the appropriate person, when he/she is available. Direct contact is best from the start.

2. At the top of the letter, include the lender’s (company) name, address, phone and fax number. Also include the current date you are writing the request.

3. Start the letter to the person who makes the decisions (that you discovered through Step 1)

4. State the content of the letter, i.e. Re: Hardship letter – Short Sale for (your address). Add your name and the loan number.

5. Explain the course of events that have lead to your request for the Short Sale approval. Have you lost your job? Do you have to move to another state on short notice? Are you going through a divorce? Do you have medical bills that are overwhelming? Were you laid off and as a result, your income has dropped several hundred or thousand dollars per month? Take as much time as you can to clearly state this part of your request. Your reasons must speak directly to why you are unable to pay your mortgage.

6. Let your lender know that you have consulted a realtor, or a lawyer, for advice on how to avoid foreclosure. You were told that the only options would be to sell your home at a loss with the Short Sale, or file for bankruptcy.

7. Ask for permission to proceed with the Short Sale at the earliest possible date.

Be prepared for the answer “no”. Not all short sale requests are granted. You may have enough equity in the home that a very small profit may be realized, or the loss would not be unmanageable if you sold your home through regular channels.

Short Sale or Foreclosure?

daka — Sat, 19 Dec 2009 11:23:12 +0000

If you realize that foreclosure is imminent you should learn what options you have instead of just waiting for the grim reaper to take your home and putting you out in the street and ruining your credit at the same time.

Today, you do have options when it comes to foreclosure. You can negotiate with the lending company and try to keep your home or you can consider a short sale. Some people will tell you that a short sale will save your credit while others say that a short sale or a foreclosure will ruin your credit. If you look at what a short sale does, I do not see how it can ruin your credit. A short sale is an agreement between yourself and the lending company to take less that the amount owed to settle your loan. Of course, if you are behind in your mortgage payment, this will be on your credit report; however, this does not necessarily have to be considered a negative factor. It will only show that you were late on your mortgage, but once the loan is settled the lending company will have to report the loan paid. One negative late payment does not look as bad as a foreclosure.

A late payment of course looks bad on your credit report but if you have positive factors as well, the negative will not look as bad. One late payment will certainly not lower your rating to put you in the group of bad credit rating individuals.

With the list of pros and cons below, you should be able to make an educated decision on whether you wish to go a short sale route or a foreclosure route.

Pros of Short Sales

* Preserve your self-respect that you sold your home* You will not suffer the embarrassment of foreclosure* No more mortgage payments* Under Fannie Mae guidelines you can purchase a new home in 2 years* If your credit report does not shoe a 60 day + late pay, you can purchase a home immediately under Fannie Mae guidelines

Cons of Short Sales

* Waiting to hear from the lending company if they accept or deny your short sale can be annoying.* The lending company will need to see all your personal records including assets, liabilities, bank accounts, and tax returns to name a few to learn if you have a financial hardship.* Buyers will need to see you home, so you have to keep your home ready for potential buyers until an offer is received* The bank does not have to accept a short sale offer

Pros for Foreclosure

* No more mortgage payments* The foreclosure process takes a long time, meaning the home is yours until the foreclosure is complete.* You do not have to keep your home available for potential buyers

Cons to Foreclosure

* The lending company can post a Notice of Public Sale on the home* A foreclosure will remain on your credit report for 10 years.* You will not be able to purchase a home under Fannie Mae guidelines for 5 years.

Pre Foreclosure Guidelines and Short Sale Negotiations

daka — Mon, 07 Dec 2009 09:18:05 +0000

Pre-Foreclosure Guidelines and Shortsale Negotiations. Deciding On A Course of Action What are some of the typical questions we hear from home owners considering a short sale? Q: How does the bank decide if they will take the reduced short sale amount? A: The department that handles the short sale file is called Loss Mitigation so that’s exactly what they do. By the time your loan gets to their department they know they are going to take a loss; it is just a question of degrees of loss. They have a computer program that estimates what it will cost to foreclose on the property, maintain it after foreclose, put the house on the market and rehab the house. If they think they can take the house back, fix it up and make a profit to defray their loss, then they will turn the short sale down and take it to sale at auction. They compare the loss if they short sell to our buyer to the loss (or profit) if they sell the house at auction. The bottom line is that it depends on what is offered compared to what the house is worth. The bank will do two valuations: the first is a BPO (Broker’s Price Opinion) and the second is an actual appraisal.

The BPO is nice because it not only shows the last three sales, but also similar properties that are active on the market for sale. For example, just because the last three homes sold for 200K, and the appraisal supports a price of 200K, doesn’t mean the bank will get 200K on this house. The house is only worth what a buyer will pay. And how much will a buyer pay? As little as possible, especially in a declining market, so the banks really do need to look at what else is available for sale that’s comparable. If a similar house is available for sale for 150K, then no one cares what the appraiser says, the bank will not get 200K if there are no buyers for that house at 200K regardless of what the appraisal says. The down side of these BPOs is that any realtor can do them, and realtors are not trained appraisers. Some realtors that do these BPOs are highly qualified and trained individuals, but many are just non-producing realtors looking for a way to make a little extra money. How much of a grip can a non-producing realtor really have on what things are selling for and what buyers are willing to pay for real estate? The appraisal carries a little more weight, but only looks at the last three sales and does not go into much detail about asking prices for active listings, so quite often the appraisal supports one purchase price, while the actual market value is lower.

With a value in hand, the banks will compare this to the short sale offer and decide how to proceed. They do not have a set rule, and it really depends on the end investor, so I can only comment on what I have seen so far. For example, a Loan Servicing company wants 75% of the appraised value (not the loan amount) in order to approve the sale. One bank wants 90% and although I have seen them go as low as 85%, I have never seen them go lower. Another bank B or bank C will accept 75% of the BPO, as long as the end investor is bank D. So as you see it varies and every situation is different. A few words about Short Sales (If you want to liquidate the property) A short sale is the best option if you have to liquidate the property and you cannot get what you owe. Short sales are better than the deed in lieu and much better than foreclosure.

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daka — Tue, 01 Dec 2009 18:19:17 +0000

Bad Real Estate Market? Hardly! Anyone Can Make $10,000, $20,000, Even $50,000 Or More With No Experience, Cash Or Credit If They Follow This Easy, Step-by-step Online Video Course. Foreclosures Are Exploding. This Course Will Allow You To Profit Bigtime!

Short Sale Video Course.

Small Loans Online For Short Term Needs: Apply Today

daka — Fri, 20 Nov 2009 23:07:13 +0000

One of the reasonable ways to obtain an individual’s own home is applying for home loans or home mortgage loan. However, such loans will certainly have high a amount of money. As a matter of fact, when you are in an emergency and you do not have enough cash, you can consider online small loans as your consideration.

In general, online small loans are loans of which amount between $100 dollars and $1,000 dollars. Such online small loans have the capability to immediately deposit the desired loan amount into your bank account directly. They could be very handy as well as a life safer for certain individuals who need immediate money or have no insurance. There are a numbers of websites that provide everything you need about online small loans from comprehensive information to step by step methods in applying for such small loans.

Usually, they allow the customers to apply for the loans online. An online applying method will definitely ease as well as facilitate the customers so as to they do not have to bother fax the documents. Many times, people in such emergency needs are having frantic or panic feeling that force them to sometime think faster. By applying for online, it will certainly help those people to immediately cash out their loan money and make the best use out of it.

Online application process is more flexible, instant, and easier as well as more practical than the conventional one. This will definitely provide every customer with all of the potential benefits as well as advantages of them could be. Generally, the online small loans application will have you to complete several important details on your personal data such as name, both full name and nick name, address, phone numbers, bank information, employment name and phone numbers as well as your employment address and payday information.

On the contrary, the particular issuers will unnoticeably make a phone call to every reference person to make sure that they are really exist as well as to make sure that you are really know the particular person. The online small loans issuers usually will also confirm your employer to make sure that you are truly one of his employees of which working period is more than six months. In general, they are good alternative to consider whenever an individual has no insurance or urgently need cash. Instant, easy as well as practical benefits of them will be more effective by applying for it online.

A short Discussion on Medicare and Medicare Supplement Plans

daka — Tue, 10 Nov 2009 17:16:02 +0000

To talk about Medicare and Medicare Supplement Plans, the first thing that we need to know is what is Medicare? The answer is almost known to all. But still let us define it a little. Actually Medicare is the health insurance for people about the age of 65 or older. This is also a health insurance for people under the age of 65 with certain disabilities. This is also applicable for people of any age with End-Stage Renal Disease (ESRD) such as permanent kidney failure requiring dialysis or a kidney transplant. The Original Medicare plans covers most of the health care services costs. As for example impatient care in hospitals, skilled nursing facility, hospice, and home health care, costs for prescription drugs, etc. It may also help lower your prescription drug costs and help protect against higher costs in the future.Though the Original Medicare covers many of the costs for health care services, but still there remains certain costs or gaps that are not covered by the Original Medicare policies. And to cope up with these costs there is the need of having Medicare Supplement Plans. The Medicare Supplement Plans helps you fill up these gaps so that one can easily meet the health care costs. And because of this very feature the Medicare Supplement Plans they are also known as the Medigap policies. These are private health care policies, which are designed to supplement original Medicare plans. These policies are specially designed to cover some of the basic benefits and more especially to fill up the gaps left behind the original Medicare plans. But it should be kept in mind that a Medigap policy is only a supplementary plan to the original Medicare plans and does not provide the total coverage of a Medicare policy. Therefore it means that you need to be under the original Medicare policy in order to get enrolled under a Medigap plan. Medicare will pay its share of the health care costs and the things that are left behind would be covered by the Medicare supplement plans.Along with these there is another thing that is to be kept in mind and it is that Medigap policy is not in any way related to Medicare advantage plan. Medicare Advantage Plans like HMO or PPO plans are different from Medicare supplement plans. And this is because it is not a way to get Medicare benefits. Moreover, if you switch over from original Medicare to Medicare Advantage Plan, you no longer can use Medigap policy to cover deductibles, copayments, or coinsurance under the Medicare Advantage Plan. And if you already have Medicare Advantage Plan, then it would be illegal for any insurance company to sell you a Medigap policy unless you switch back to Medicare Original Plan. Therefore it can be said that the Medicare Supplement Plans are directly linked to Original Medicare plan.Moreover, the Medicare Supplement Plans are solely sold and administered by the private insurance companies but they are only allowed to sell 12 standard Medigap plans under the letter cover A through L. Each of these Medigap plans have different policy coverage but the benefits and coverage of the plans are the same under the same letter cover irrespective of the insurance company selling it. Though the amount of premium may differ.

A Short Discussion on Medigap Health Insurance Plan

daka — Wed, 04 Nov 2009 16:11:31 +0000

The Medicare supplementary plans which are generally known as supplementary plans that cover the every minute expenditure that are sided by the original Medicare insurance are meant to bridge the gap between the policy coverage of the Original Medicare and the actual medical bill payable. The problem with an original Medicare plan is that it’s bound to some factors as it is unable to pay every medical service that you may need in the time of crisis. So it can be better to say that there are several gaps between the original Medicare plan and actual medical bill which stands for your actual claim of money. But you have to be member of this insurance plan as to claim the benefit of a Medicare supplementary plan insurance. This is for the extra benefits that you are now deprived of. This is a kind of health insurance plan that helps you pay for some of your costs in the original Medicare and also for some of the cost for some medical aid that it does not cover.

These supplementary plans are not under the administration of government like the original Medicare supplementary plans but unlike that it is under the sole administration of some private companies. According to the law the private insurance companies can offer only twelve standard Medicare Supplement Insurance Plans, named A through L. each of these plans have their own set of benefits, different from the others. But to be precise all the supplementary plans provides the basic benefits of the Medicare part A and B. It is always advisable to read and study all the Medicare insurances plans before investing your money because it is very important to make your mind in which you are aiming to invest your money to support your future. What is important for you will invest in that plan and will be benefited in that crisis. All the twelve policies are made remembering all the requirements that are generally needed in the health crisis. Besides that the fact that should be kept in mind is that, no matter from whatever insurance company you may purchase a particular plan, all of the plans with the same letter cover must provide the same benefits. As for example if you purchase a Medigap plan C policy, it should cover the same benefits without depending on the company that is selling the plan. However, the premium rates may vary for different companies. Therefore you are free to purchase any Medigap policy from the company you like and be sure to get the same benefits provided by the other companies. Though it is said earlier that all the twelve plans covers more or less basic benefits but each one of them offers some additional benefits also. Apart from plan A all the other plans B to L offers some different kinds of benefits of plans.

Medicare supplements plans are also known as Medigap policies because it covers or bridge the gap between the original and the supplementary. Both the Medigap and Medicare supplementary plans are the same known by two different names.

Understanding Negotiations in Short Sales

daka — Mon, 26 Oct 2009 17:13:01 +0000

For anyone that knows that a foreclosure is just around the corner, a short sale should at least be considered. A short sale can protect you in a few ways that might just help your credit, as with a short sale, a foreclosure will not be placed on your credit report. A short sale does not always wipe the slate clean, though, you may still owe the lending company money. The reason is that the lending company will be accepting less than what is owed on the home and in some cases will expect you pay the difference. This is where negotiations come into play.

You may be confused when it comes to talking with your lending company; however, you should know that every type of lending company has a department that works directly with their customers to negotiate short sales. The department is usually known as loss mitigation. Talking with department before you receive a foreclosure notice may not be your best option, as they will more than likely turn a blinds eye to your problem. The reason this is true is that all lending companies would like to receive the money that you borrowed including all the interest, this is the way they make money.

After you have received a notice of default, you should then make an appointment with the loss mitigation department of your lending company. In some cases, you may wish to bring with you an attorney to ensure your rights are not violated. In most cases, the process is easy as the lending company normally has a predetermined criteria for short sale negotiations. A lending company, by law, has a right to deny a short sale, this is where you will need your negotiating skills to kick in. this is one reason having an attorney by your side will do wonders. The lending company will of course want to receive as much money as they possible can, however, most will take reasonable offers.

If you have found a person that wishes to purchase your home at a lower amount than what you owe, you may be able to negotiate with the lending company, but if the amount of money is quite a bit lower than the amount you owe on the existing loan, you may have a hard time convincing the lending company that this is a good deal. If you cannot afford to pay your mortgage payments, you are headed toward foreclosure, then you must do something or the foreclosure will be on your credit report and you will have a hard time buying a home for a very long time. On the other hand, the lending company does not wish to lose money. If they can sell your home at auction, or put it up for sale and gain more money than you are offering, they will more than likely deny your short sale offer. Be prepared to negotiate and provide the lending company with a reasonable offer.

What Is A Short Sale And Is It A Good Idea?

daka — Mon, 26 Oct 2009 08:03:09 +0000

As a homeowner, when your financial situation prevents you from being able to keep up with your mortgage payments, there are a number of options to choose from. Among these is the short sale option. Due to the state of the economy, short sales have become increasingly common among Orange County homes and in some cases, it is the most recommended course of action for homeowners facing financial hardships.

Orange County property management professionals define a short sale as a legally binding agreement to sell the home for less than the amount owed on the mortgage.

One of the advantages of a short sale is that it reduces the negative impact on your credit. A short sale must be approved by the seller’s current lender(s). The process typically takes a minimum of 45 days for the lender to approve the short sale. The Mortgage Forgiveness Act of 2007, which has been extended to 2010, protects OC real estate home owners from debt collectors seeking monies owed beyond the sales price of primary residences.

Qualifying for a Short SaleAny form of financial hardship may qualify a home owner for a short sale. A short sale is the best option for home owners facing difficult financial times in certain cases. Rather than walking away from a negative asset or losing your home to a bank foreclosure, a short sale will have a less severe impact on your credit. For more information regarding short sales on Orange Count and Newport Beach homes, contact your local short sale negotiators to learn more.

Understanding a Short Sale

daka — Sun, 25 Oct 2009 21:24:16 +0000

A short sale is a sale that aids individuals that are nearing foreclosure by the lending company accepting less than the amount owed on the loan. This process can and does help those that are willing to negotiate with the lending company, however, the lending company, bank, or Mortgage Company has to agree to this discount. The individuals that wish the lending company to agree to a short sale must prove they have financial problems and cannot pay their mortgage. The problems in most cases prove to be economic situations, hardships due to illness, or death in the family. If the home is sold in this manner all the money will go directly to the lending company, the homeowner will not receive funds of any type and will lose all equity in the home. The reason most individuals go with a short sale is to save their credit.

If you are considering a short sale, you may wish to talk with an attorney and of course a real estate agent that understands the negotiation process. The lending company will of course, want to receive as much money as they can that is still owed on the loan, as this is how the lending company stays in business. If all individuals defaulted on their loans or received a discount on their loan, the lending company would soon go out of business. This is why you need a professional on your side to help you with negotiations.

No matter how much negotiating you do, the lending company has the final say as to whether they will agree with the short sale. The lending company the majority of the times will agree to a short sale if you can prove financial hardship. If the lending company does accept the short sale, you may still be responsible for the remainder of the loan. In almost all cases with a short sale, the full amount of the loan is not met and the original homeowner will still have to pay the remainder of the loan.

If the original homeowners still owe money on the loan, this can be a problem for the new homeowners, as the lending company will hold the title until the remainder of the loan is paid. In too many cases, the lending company will not accept a short sale, as they believe the person can pay their loan or that they can still receive the amount owed on the loan through foreclosure and resale. However, the decision is often based on the real estate market in the area.

A short sale is actually negotiating with the lending company to get them to take less than you owe on your mortgage loan. If at all possible, the idea is get the lending company to accept the money received from a short sale as the full amount on the loan whereas, nothing more has to be paid to satisfy the loan. In most cases, during the negotiating the lending company will provide an amount they will accept to satisfy the loan. If this amount is not met, the seller will then have to pay the rest before the lending company will give the title of the home to the new owners.