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Orange County Short Sales |
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Orange County Short Sales
How do you know if you need to do a short sale? If you wish to sell your property and you would have to bring cash to the closing table, you are short.
If you are asking your lenders to absorb some or all of that short fall and they agree you have a short sale.
Orange County Short Short Sale
The following defininition of a real estate short sale may be found on wikipedia. I add my comments in parenthisis where I think they will be useful. The last sentence is the reason I have used this explanation from wikipedia.
In a short sale, the bank or mortgage lender (or its servicer and now lately the lender mortgage insurance company) agrees to discount a loanbalance because of an economic or financial hardship on the part of the mortgagor (with some lenders the hardship is an easy threshold to cross and with others it is more diffiicult to establish). This negotiation is all done through communication with a bank's loss mitigation or workout department (with Citibank or Bank of America you frequently wind up negotiating with the representative of the mortgate insurance company. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes, but not always, in full satisfaction of the debt. (if your release from the debt is not in writing, you may not wish to do the short sale. ) In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower's financial situation.
A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack thereof), by determining the probable selling price from a Broker Price Opinion BPO (also known as a Broker Opinion of Value (BOV)) or through a valuation of an appraisal. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.
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Last Updated ( Thursday, 30 July 2009 )
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