Short Sales REQUIRE hardship!

What’s up with upside-down owners who want to sell their property as short sales, yet are living off the fat of the land?

Let’s get this straight….  short sales are sometimes approved by the lender IF there is hardship suffered (and proven) on the part of the owner – lost their source of income, illness, handicap that prevents income earning,  divorce, death, etc. 

THAT THE OWNER HAS TWO PORCHES IN THE GARAGE, A VACATION CHALET (income producing property) IN VALE, CO AND THEIR KID IS ATTENDING HARVARD IS *** NOT *** CONSIDERED HARDSHIP!

I heard today of an owner who wants to sell for $399,000, but owes $550,000 to the lender…  well, we all know that the market has been tough on sellers, but ya can’t call ‘Short Sale’ on an upside-down property,  when you pulled $150,000 in equity and now want to walk away without being able to prove hardship.

“Oh,  there’s no hardship….  we just want to walk away from the property”!   Baby-shoes……  this is the REAL WORLD!  In a past life, one could declare bankcruptcy, but the authorities got wise to that one and started attaching real property.  It is no longer possible to mortgage a property, HELOC it to the hilt to finance the kids college, the wife’s liposuction and face-lift AND the family trip to Europe and then say “But I just want to walk away”!  Especially if there are two Porches in the garage and a yatch moored at the Marina! This would be the same as going to a restaurant, ordering a sumptuous meal AND EATING IT and then saying that the food was no good and walking out without paying for it!  Go on…  see how far you get with THAT one!

Sheesh!  Get REAL, won’tcha?

The owner, in this case, listed his property as a short sale and called his agent THREE DAYS LATER to demand to know why the property had not yet sold!  Um…..  short sales, like REO’s (bank owned properties) take time and patience. It is quite possible to have several qualified buyers for the same property, but everything is contingent on the lender and their ability to process the never ending stream of short sales!

I am not surprised that there are so many foreclosures with owners wanting to ‘walk away’, having pulled all the equity and having no proven hardship.  Are you surprised that the lender might foreclose on such an owner?  Do you understand NOW why there are so many foreclosures, when some sellers stop paying their mortgage, mistakenly assuming that a short sale is in the offing? And it doesn’t matter that Realtors tell them that it’s not going to work – they believe that we can pull rabbits from our hats, too!

 

Here’s the Short Sale Golden Rule:

1)  Get a good Realtor – one who has worked Short Sales before

2)  Make sure that yours IS a hardship case and have your Realtor draft the letter.  Sign it and have your Realtor present it to the lender.

3) DO NOT STOP PAYING YOUR MORTGAGE and insurance, until you have been assigned a Loss Mitigator.

If this is not done in this order, your short sale could rapidly turn into a foreclosure and while short sales are considered ‘debt forgiveness’, foreclosure will stay on your credit report for TEN YEARS!

Make sure you have a good and experienced Realtor!

 

Althea Garner
The House Of Homes Online
http://www.HouseOfHomesOnline.com

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3 CommentsLeave a comment

  1. Great Blog post. I am going to bookmark and read more often. I love the Blog template if you need any assistance customizing it let me know!

  2. Wow, I’m surprised and not surprised that they did that. It appears a lot of people want out now.

  3. I thought a Porch was a place on the front of your house where you sit in the swing and relax. Didn’t know it was something that goes in your garage.


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