Sacramento Real Estate Views

Have You Received a Notice of Default?

Time Is Of The ESSENCE!

If you’ve received a Notice of Default and are in the beginning stages of the foreclosure process, you have a small window of opportunity to sell your home short and avoid the trustee’s sale.

If you don’t get the documents to the bank very early in the process, they could deny your sale and your home could go to auction.

Once the house sells at auction, you’re rights to stay in the home are gone and you’ll need to move almost immediately upon the close of the auction.

My recommendation is to have the required documents to the bank 30 days prior to the trustee’s sale to make every attempt to get a postponement.

What You’ll Need To Get It Done

Selling your home short is a stressful process but foreclosure is worse.  You can make it easier by being prepared upfront before you communicate with your bank about your desire to sell your home for less than you owe.

Your lender is going to require that you substantiate your reason to sell short and they are going to want all of your personal financial information upfront as well as documentation regarding your situation and the listing of your home.

Here is a brief list of what is commonly asked for from most lenders.

List of Required Documents

Most lenders, with few exceptions, will request a list of documents from you much like the list below.  This information is personal but you’ll want to provide everything as concisely as possible so that you’ll be considered for a short sale.

Selling your home short is a far better option than going through the foreclosure process.

• Bank Statements – If you’re are employed, you’ll need two months. If you’re self employed you’ll need 4 months.
• Financial worksheet monthly expenses – The lender or bank is going to want to know where your money is going.
• Copy of your homeowners insurance policy.
• A hardship letter signed and dated – Lenders need to see why your can no longer afford your home.
• Two recent pay stubs.
• Two of your most current year tax returns.
• 1099’s or W-2’s for the last two years.
• Proof of occupancy – utility bill of some kind.
• 4506T request for tax transcripts

At the same time you send in these documents, you’ll want to also show that the house has been listed for sale and that you have a contract pending their approval of the sale as well as all of the buyers documents.

Loan Modifications

What I’ve found is that the larger lenders want their borrowers to go through the loan modification process first to find a solution rather than go directly into a short sale.  Once you’re in the loan modification process, everything from a foreclosure sale perspective stops.

While this isn’t always the case that they want you to go through the loan modification process, it doesn’t hurt even if your intention is to sell short regardless of the outcome.

At this point, lenders/investors haven’t been willing to reduce principal loan amounts to keep people in their homes.  Reducing principal loan amounts is the only viable solution for the homeowner for the long term but for the banks, they’d rather foreclose or sell short than to lower the principal loan amount.

This makes NO SENSE but there must be a reason for it on their level.  I know no one who has any rational idea of why this is.

Now What?

After you have all of your very personal information together, you’ll need to have someone knowledgeable about the process put the house on the market and help negotiate the sale for you.

You don’t want to do this on your own as it is VERY frustrating and could stress you beyond your rational limits.

It’s always better, especially if it costs you nothing, to have a Realtor handle the short sale for you.

We have a professional negotiation team handle all our short sales and we close a very high percentage of them as a result.  We keep you updated weekly so that you know every step of the way where we are in the process.

Looking to sell short?  If you’d like more information on how we handle short sales, please fill out the form below for additional information and we’ll get back to you promptly.

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Tags: Rocklin, Roseville, sacramento, short sale

This entry was posted on Thursday, July 29th, 2010 at 6:22 am and is filed under Short Sale Information. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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