Short Sales?  If you are facing the possibility of foreclosure, you may be able  to sell your home for less than is owed with the consent of your lender.

• All About A "SHORT" SALE

The "short" in the title of this presentation refers to the fact that the "payoff" amount agreed to in the transaction is indeed, "shorter" than the mortgage balances on the property. 

There are three stages of a property that is a subject of Foreclosure:

• Pre-Foreclosure: This includes a short sale, deed in lieu of foreclosure, cash for keys, quitclaim deed, reinstatement of mortgage, forbearance agreement etc.
• Foreclosure: At the sheriff's auction lenders bid against everyone else to gain control of the property (deed). Most liens against the property are extinguished after this action.
• Post-Foreclosure: Majority of the properties that are subject of a foreclosure end up in this category. The property then becomes a liability to the Lender, FHA (HUD), or VA and all except VA hires a Real Estate Broker to list and sell the property. HUD and VA properties are on the Internet (HUD.org and Vahomes.org) bids must be placed thru a registered Broker/Realtor®.

Difference between a "Short Sale" and a "Foreclosure"

Short sale is a process where a negotiated settlement is made between the lender that holds the mortgage and the seller for a third party buyer usually facilitated by a professional like a Realtor or an Attorney, even before the foreclosure process is initiated by the lender. Therefore it is considered a pre-foreclosure sale. Foreclosure may be the only option, if there are too many liens and other issues clouding the title, as a "cleansing process" to clear up the title.

Short Sale Vs. Foreclosure

Short Sale	Foreclosure
Negotiated Settlement	Court Settlement
Seller's Credit Bruised	Seller's Credit Ruined
No Attorney Fee	Big Attorney Fee
Seller's Peace Of Mind	No Peace Of Mind
Buy Again In 2 yrs	Buy Again in 10 yrs
Liens Negotiated	All liens Extinguished

A Win

Seller

• Stays in the Property Longer
• Smoother Transition
• Zero Sale Proceeds
• No Deficiency Judgments
• Avoids Foreclosure on Credit
• May Avoid Bankruptcy
• Less Worry

A Win

Lender

• Same or MORE Net as in Sheriff Sale but in less time
• Proceeds within 24 hours of Closing
• Reduces Non Performing Asset Inventory
• Full-Blown Appraisal/BPO
• Possible 1099 for Forgiven Debt
• May pursue owner for Deficiency Note

Lender's Financial Draw Backs to Foreclosure