Simon Volkov, author of “The Short Sale Hardship Letter eBook course” shares his knowledge, resources, and insider-secrets while teaching readers how to write the perfect hardship letter. This step-by-step guide is short, simple and easy-to-understand yet provides powerful techniques you won’t find anywhere else. Available for instant download at www.ShortSaleHardshipLetter.com.
Archive for Bankruptcy
Jan
02
Short Sale Hardship Letter: Tips For Writing A Letter Of Hardship To Your Bank
Posted by: | CommentsSan Diego Foreclosures For Sale
A short sale hardship letter must be provided to mortgage lenders when borrowers engage in short sale transactions. When banks enter into shorts sales they agree to accept less than the borrower owes, as long as the borrower can sell their home within a certain time period.
The short sale hardship letter is used to provide details of the events which caused the borrower to become delinquent on their mortgage. Lenders require borrowers to submit financial documentation proving they are unable to cure mortgage arrears and have no choice but to sell the house short or fall into foreclosure.
Short sale letters should include a timeline of events and explanation of actions the borrower has taken to resolve financial challenges. The letter of hardship should be thorough, yet concise. While lenders can be sympathetic to your plight, they aren’t interested in knowing every detail of your life.
The following is a fictional hardship story which provides an overview of the type of information to include in a letter of hardship.
John and Jane Jones purchased their home in June 2004. At the time John and Jane were employed fulltime, held financial portfolios and a well-stocked savings account. In May 2005, John was involved in a motorcycle accident and required multiple surgeries and months of physical therapy.
John was unable to return to work on a fulltime basis for three years. Although he received disability payments, the amount he received barely covered the private nurses John required the first year of his recovery. The couple had to tap into their savings account to meet their monthly obligations.
In July 2007, Jane’s employer of ten years suffered a fatal heart attack. Unable to continue operations on her own, his wife sold the business and Jane lost her job and their health insurance. In order to pay for John’s therapy, the couple liquidated their financial holdings.
In September 2007, Jane was diagnosed with breast cancer. Although it was caught early, the Jones’ did not have health insurance and the treatments quickly depleted their savings account. Fortunately, Jane only had to endure one round of chemotherapy and a relatively minor surgery. She was able to return to work within three months.
With years of financial setbacks, the Jones’ began falling behind on their mortgage payments. Within a matter of months they were forced into bankruptcy. They filed for Chapter 13 protection and reorganized their debt. They were able to adhere to their repayment plan and then the bottom fell out.
In November 2008, Jane’s cancer returned. Although they had health insurance, Jane’s treatments were much more aggressive and she was unable to work. The Jones’ missed two of their Chapter 13 payments and their lender petitioned the court to have their bankruptcy dismissed.
The lender’s attorney made a court appearance and after hearing their story, offered to allow them the option of a short sale. Although the Jones’ wouldn’t be able to stay in their home, they would be able to walk away owing nothing.
Every person facing foreclosure has a hardship story. Your story is just as important as the next person’s. Hardship letters are read by loss mitigator’s. Although loss mitigators do not make the final decision on a short sale they can have substantial influence and will root for those they believe are experiencing serious financial hardship.
Keep in mind loss mitigators are bombarded with short sale offers. When writing your short sale hardship letter stick to the facts and avoid portraying yourself as a ‘victim’. While you want bank mitigators to empathize with you, you don’t want them falling asleep while reading your letter of hardship.
Dec
31
Short Sales-frequently Asked Questions
Posted by: | CommentsSan Diego Foreclosures For Sale
Answers to the Most Frequent Asked Short Sale Questions
1. Q Will I be eligible for a short sale if I have 2 mortgages?
A Yes- The majority of short sales involve 2 lien holders. They both have to agree and be satisfied. If only the first lien holder is paid off after closing, the second mortgages terms has to be re-negotiated and resolved.
2. Q How Many Payments do I have to Miss to Qualify for a Short Sale?
A None—-In the later part of 2007—Most major lenders began to accept offers of a short sale from sellers that had never missed a payment or been late.Their personal situation had changed.
3. Q Will I be Responsible for Additional Income Taxes for the Difference of Loss to the Bank?
A No in most cases. It was true in the beginning of short sales; but now the rules have changed. Consult with your CPA or tax Attorney. The law has been changed so that most people are not responsible for any additional taxes.
4. Q Will I have Trouble Qualifying for a Short Sale If I Owe More Than My House is Worth?
A No If your debts are greater than your assets and you cannot make your payments; then you will qualify for a short sale. It’s that simple.
5. Q Is There Time for a Short Sale Before the Foreclosure Process Begins If I Have Only Missed One Payment but Know I will Miss A Lot More?
A It varies in each state. A rule of thumb is; 6 months to a year. A well priced short sale usually sells and closes in less than 120 days.
6. Q Is A Short Sale Right for Me If—I Have The Resources to Pay All or Part of the Negative Amount Owed. I Don’t Want to Ruin My Credit. I Just Can’t Make My Payments Any Longer.
A In this case; it would be better to work out a repayment plan with the first lien holder. The monies you have will more than likely be used to pay the 2nd lien holder. They will release the lien. The property can be sold and closed in a regular manor.
7. Q Does the Lender Have to Approve My Home Before It Be Listed As A Short Sale?
A No There basically is no such thing as being short sale approved by any lender. The approval occurs after there has been an accepted offer.
8. Q Will Property Taxes Still Have to Be Paid If I do A Short Sale?
A Yes Property taxes always will have to be paid. Each lender has different policies and it will depend on the specific agreement you reached while negotiating the short sale. So, either yourself or the lender will be responsible for paying the property taxes.
9. Q Why Doesn’t my Mortgage Insurance Pay The Deficiency Amount?
A . Mortgage Insurance is not for the protection of the owner. It only protects the lender. In most short sales there are 2 lien holders and NO mortgage insurance.
10. Q Who Pays the Listing Agent’s Commission?
A The bank will pay all commissions along with the usual closing costs.
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Keith Junor is a Licensed Realtor and Mortgage Broker in Florida with 17 years experience. He authors a Blog at www.The expertsinrealestate.com that gives timely advice on buying and selling, credit repair, mortgages and foreclosure. He can be reached at kj1010@bellsouth.net
Nov
27
Got Foreclosure Trouble? Understanding Non-judicial Foreclosure
Posted by: | CommentsSan Diego Foreclosures For Sale
Non-Judicial foreclosure is the process by which your mortgage lender, under the specific and express terms of your mortgage, will claim a legal right to your property and proceed with having your property sold at a public auction in the absence of a formal judicial hearing or proceeding. Since the courts do not administer the foreclosure process in a non-judicial foreclosure state, the authority and responsibility lies with the trustee who must follow the strict rules governing the foreclosure and sale process in your state.
The major advantage of non-judicial process is that the mortgage lender, in most cases, is not permitted to pursue a deficiency judgment against you in the event that your property sells for less then the amount you still owe on your home loan.
How long does non-judicial foreclosure take?
A non-judicial foreclosure starts when the trustee, at the request of your lender, prepares and mails to you a legal document known as a “Notice of Default and Election to Sell”. This document, in most cases, is your official notice that because of your non-payment and default of your loan, a non-judicial foreclosure process has commenced and that the lender intends on proceeding with the sale of your home at a public auction. The proceeds of such a sale will be used to payoff your loan with the lender.
In most cases, the non-judicial foreclosure process will take between two to four months to complete leading to the sale of the property. This is your window of opportunity to attempt to stop the foreclosure process. You should know that the time period could turn out to be longer if the trustee fails to fully comply with the terms of mortgage documents or if the trustee violates any of the many rules governing the foreclosure process in your state.
What is a Notice of Default and Election to Sell?
The trustee must comply with the laws governing recording, mailing, posting the Notice of Default and Election to Sell. However, in most cases, there is no legal requirement that you receive “actual” notice of the foreclosure. This sounds surprising in light of the importance of notice in all legal proceedings. Most courts have ruled that a foreclosure is valid so long as the trustee carried out the notification procedures in compliance with your states law, irrespective of whether you were unable to learn of the notice because you were out of the state or engaged in other matters when the notice was sent to you.
What is the Reinstatement Period?
This area is often confused with the homeowners right of redemption which is completely different. Depending on your specific state law, reinstatement normally commences upon the mailing of the Notice of Default to your home and ends sometime before to the trustee’s sale of your property. The critical feature of the Reinstatement Period is that it provides you with a way to stop the foreclosure process by bringing your mortgage payments fully current again. The lender may also request that you that you reimburse them for attorney and trustee fees that they incurred in the foreclosure process.
How do I reinstate?
It is recommended that you contact the trustee immediately and inform him of your intention to reinstate and bring your loan current. You will first need to obtain from the trustee the exact amount you will need to pay to bring your loan current again. The trustee by law must provide you with this information promptly. Should you pay that amount to the trustee, he must by law immediately stop the foreclosure process. You should then receive the trustee’s notice of termination of foreclosure, which is your proof that the foreclosure proceedings have ended. The notice should also be officially recorded to protect your title to the property.
What about partial repayment?
Most lenders will NOT accept partial payment within the reinstatement period. However, you should consider this option if your lender is open to it and agrees to postpone the foreclosure and you are able to convince the lender of your ability and intention to bring the loan payments current again. Be careful though, you don’t want to be making partial payments if you think you will not be able to bring your payments current again. You could end up losing more money and still end up getting you’re home foreclosed.
It is important to be both realistic and candid with your lender. Also keep in mind that partial payment will not by itself operate to extend the reinstatement period or terminate the foreclosure process. To accomplish these concessions, your lender must agree to do so expressly and in writing.
What is the Notice of Trustee Sale?
After the Notice of Default is issued, and assuming you have not brought your loan current during the reinstatement period, the trustee will issue a Notice of Trustee Sale. The purpose of this document is to notify you and others of the exact time and date your property will be put up for sale by auction. The date of sale is typically about two-to-four weeks after you first received the Notice of Trustee Sale. You might be able to stall the process by a few weeks if you notice any material inaccuracies in the Notice of Sale and you communicate the same to the trustee in writing.
For this and more information on debt, bankruptcy and foreclosure visit www.gottrouble.com/legal/finance/index.html
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Oct
25
I am one of those 1st time home buyers who got in at the bad time and got an adjustable loan and it has adjusted on me. My combined house payment (1st/2nd) is now over 5500 a month. Which I cannot afford. I was unable to refinance because the value of my house is close to 70k less than what I owe. I need to figure out how to get out of this house with as little damage to my credit as possible be that a foreclosure or bankruptcy. How do you determine what is be best way to do this? How do I go about finding a good lawyer to assist me here in San Diego?
Oct
18
How Can a Short Sale Help Me?
Posted by: | CommentsSan Diego Foreclosures For Sale
A real estate short sale occurs when a property owner sells their property for less than the mortgage amount owed to their lender(s). On the surface, this may seem like only the borrower benefits from such a transaction. However, that couldn’t be further from the truth. Note: See our “Are You a Short Sale Candidate” to find out if you or someone you know are short sale candidates.
For discussion purposes we are going to assume a homeowner is a short sale candidate.
For the homeowner, a short sale makes it possible to sell their home for less than the total amount owed. The sale of the property releases the homeowner from their debts and obligations without having to file bankruptcy or endure foreclosure. The homeowner is able to save their credit, regain their dignity and their peace of mind. Lastly, the homeowner will be closer to rediscovering the American dream of homeownership because they are able to amicably resolve their lender(s)’ concerns.
For the lender(s), a short sale can be less costly than foreclosure and can provide an acceptable hedge against future price declines within the market. Also, for lenders that have become insolvent and need to liquidate assets, a short sale is a way to quickly raise capital when compared to the foreclosure option – a process that could take a year or more to accomplish. Lastly, for lender(s), a short sale means a guaranteed loss now as opposed to an uncertain loss in the future. This may be in many instantances a much larger loss.
For the investor buyer, a short sale offers them the opportunity to “Buy a property for as much as 40% or more below market value.” This discount means that they are able to make substantial profits.
For the home buyer, a short sale offers them the opportunity to buy a more affordable home. For some, this is the only way to experience the American dream and obtain homeownership, as the lower price relates to a lower and more affordable monthly mortgage payment.
For the Realtor or consultant, a short sale provides the opportunity to earn a fee or commission for helping a struggling homeowner. In many down markets short sales are the only viable option for continued real estate sales. During difficult economic times and recessions, one or two extra sales per month may be the difference between earning a living or looking for another job. Those extra sales each month can come from negotiating a short sale.
If you are a Property Owner and realize the benefit of negotiating a short sale for your property instead of facing foreclosure or bankruptcy, then we encourage you to Become a Property Owner Member today!
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