Short Sale vs. Foreclosure

Worried About Losing Your Home To Foreclosure in Broward County?

Sometimes, bad things happen to good people.  Or live happens.  You are not alone.  Nationwide, almost 10% of allmortgages are in default, meaning that they are 30+ days late with their payment.  Florida is one of the hardest hit states in the country.  Even in Broward County, which is paradise, we are not immune to the challenges of this market.  Many of the Broward County foreclosed homes could have been avoided if the right action had been taken.  

The Heather Edwards Team can help you find a solution.  When attempting to avoid foreclosure, your choice of your Broward County short sale agent matters.  Whether your solution will keep you in your home, or allow you to sell your home in what is called a "short sale," our goal is to negotiate with your lender and help you avoid a credit-destroying and emotionally-damaging foreclosure.  We have been doing short sales for years and have helped clients in almost EVERY city and price point in Broward County.  Your agent does matter.  You can trust in your Broward County County short sale agents, the Heather Edwards Team.

There is light at the end of the tunnel, and we can help you reach it. 

Why Not Let your Broward County home Just "Go Back To The Bank?"

While it may not seem like it now, there will come a time when your current financial troubles will pass.  You will feel much better knowing that you did everything you could to avoid this devastating financial consequence for owning your underwater Broward County home.  The chance at avoiding foreclosure takes only effort and cooperation on your part.  As your Broward County short sale experts, we will do all the rest, and invest our time, money, and effort.  You can avoid foreclosure for your Broward County or Martin County home by simply calling us today.  You can reach me at (561) 463-0840.

Reasons To Avoid Foreclosure on your Broward County home:

Issue
Foreclosure
Successful Short Sale
Future Fannie Mae Loan – Primary Residence (Effective May 21, 2008)
A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.
A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 3 years on average.
Future Fannie Mae Loan – Non Primary Residence (Effective May 21, 2008)
An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years.
An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 3 years.
Future Loan with any Mortgage Company
On any future 1003 Application (Standard Loan Application), a prospective borrower will have to answer YES to question C, in Section VIII, that asks, “Have you had property foreclosed upon, or given title or deed in lieu thereof?” This will affect all future rates.
There is no similar declaration, or question regarding a short sale.
Credit Score
Score may be lowered anywhere from250 to over 300 points. Typically, this will affect score for over 3 years.
Only late payments on mortgage will show, and after sale, mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points, if all other payments are being made.  A short sale’s effect can be as brief as 12 to 18 months.
Credit History
Foreclosure will remain as a public record on a person’s credit history for10 years or more.
A short sale is not reported on a credit history. There is no specific reporting item for “short sale.” The loan is typically reported as “Paid in full, settled.”
Security Clearances
Foreclosure is the most challenging issue against a security clearance, outside of a conviction for a serious misdemeanor or felony. If a client has a foreclosure, and is a police officer, in the military, a government employee, a security officer, or any position that requires a security clearance, in almost all cases, clearance will be revoked and position will be terminated.
A short sale, on its own, does not challenge most security clearances.
Current Employment
Employers have the right, and areactively and regularly checking the credit of all employees who are in sensitive positions.  A foreclosure, in many cases, is grounds for immediate reassignment or termination.
A short sale is not reported on a credit report, and is, therefore, not a challenge to employment.
Future Employment
Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have, and, in most cases, will challenge employment.
A short sale is not reported on a credit report, and is, therefore, not a challenge to employment.
Deficiency Judgment
In 100% of foreclosures (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment.
In some successful short sales, it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner.
Deficiency Judgment Amount
In a foreclosure, the home will have to go through an REO process if it does not sell at auction.  In most cases, this will result in a lower sales price, and a longer time to sell in, a declining market. This will result in a higher possible deficiency judgment.
In a properly managed short sale, the home is sold at a price that should be close to market value, and, in almost all cases, will be better than an REO sale, resulting in a lower deficiency amount.


We are here to help.  Simply contact the Heather Edwards Team now for your Broward County foreclosure and short sale questions. (561) 463-0840

 

What Is A Short Sale?

A Short Sale is when:

  • A homeowner is authorized, by the bank, to sell for less than what is owed on the mortgage.
  • The lender authorizes or accepts the sales price as a payoff.
  • The seller avoids a credit-destroying foreclosure, and sometimes they can also avoid a deficiency judgment.

Why Would A Lender Agree To Lose Money?

  • A lender loses significantly more money if they have to incur the additional expenses of a foreclosure, as opposed to accepting a short sale.
  • We help them see that it a win-win solution to a difficult situation/
I've Already Received My Foreclosure Notice.  Is It Too Late For A Short Sale?
  • The short answer is no.  The foreclosure process is changing everyday and we are knowledgeable of the changes that impact our clients.  
    The right team, like the Heather Edwards Team can help you extend the foreclosure timeline up to 6 months, and in many circumstances up to 7 or 8 months.
  • A home sale can be done and approved, up to the day of the bank sale, or auction of the home.

I Haven't Missed Any Mortgage Payments.  Can I Still Do A Short Sale?

  • Oftentimes, the lender will not consider a short sale if there have not been any missed payments.  That issue can be overcome if we can show a compelling reason (hardship) why the payments have been made, and why the payments are going to stop in the near future.
  • We would need to show how the payments were made, and where the money came from.  If the payments were made with your credit cards, by borrowing from family members, or even if the money came from retirement accounts, as an example, it would help build the case.  This will not guarantee that the lender will accept the short sale, however, there are instances where they have done so.

Do you have a Luxury home in Palm Beach County?

  • The Heather Edwards Team has an Exclusive Marketing Plan that will allow us to give your special home the exposure it deserves including radio exposure,Sportstar Relcoation, and international and cash buyers.  
  • We are a team with a Designated Short Sale Department and have the experience and connections to get you to the closing table.  Call us, you'll know we are the right team to help you.  Selling a Broward County Luxury Short Sale takes expertise,Keller Williams Realty can help.

How Do I Pay The Realtor Commissions, Taxes And Other Expenses Associated With A Home Sale?

  • The homeowner doesn't pay any of the expenses associated with the sale of the home, such as commissions and other closing costs.  Those expenses are paid by the lender.  They are, however, included as part of the total shortfall that the owner would be responsible for, if the bank is successful with a deficiency judgment or promissory note.
  • The bank may ask the homeowner to reduce the lender's loss by making a payment, if the homeowner has any "extra" money in savings accounts, etc., or by signing a promissory note.
  • In December 2007, President Bush signed into law, the Mortgage Forgiveness Debt Relief Act, which eliminates the capital gain income tax that used to be levied on the forgiven portion of the primary residence's sale.  The tax is still in effect for second homes, and investment properties.
     

To speak confidentially with the Heather Edwards Team about your real estate options, simply contact us now  (561) 463-0840.