Short Sale Blog

Here is the latest short sale news at Seattle Short Sales. We assist hundreds of Seattle area homeowners with short selling their home and avoiding foreclosure.

Millions of HELOCs To Reset: Are Borrowers Prepared?

Seattle Short Sales - Thursday, September 25, 2014

One pressure point coming to light in the up-and-down housing recovery is the reset awaiting millions of Home Equity Line of Credits taken out during the housing boom of the mid 2000s. A big shift is set to occur – and the question keeping analysts guessing is the impact it will have on millions of homeowners and the economy overall.

Black Knight Financial estimates that at least 2.5 million borrowers will face HELOC resets over the next three years.  At issue, increased monthly payments that may “shock” unprepared borrowers, to quote TransUnion.

Millions of HELOCs To Reset to Larger Payments

During the bubble years, HELOCs were especially popular, based on their low monthly payment, and the high home values. Some banks even offered HELOCs where the available credit increased automatically as the equity in the house rose along with the home's value. HELOC payments start low since the typical structure only requires that the homeowner make the interest-only payments for the first ten years of the loan. Then, after ten years the loan matures and fully amortized payments are due in order to begin paying off the loan over time.

Translation, the new “reset” payments can be several times larger than the interest-only payments. The average increase in payments is estimated at $250 per month; potentially causing the homeowner a hardship when faced with paying the higher second mortgage payments. Their budgets are used to one thing – and soon they’ll be facing another. 

Are borrowers prepared? 

Under Consumer Financial Protection Bureau rules, servicers must notify borrowers of a reset 120 days in advance. This notice must include contact information for borrowers to contact housing counselors for advice and assistance. 

Using history as a guide, contacting homeowners is not easy. In fact, there are over a billion reasons for concern. Why? Over a billion dollars in mortgage settlement reparation checks were sent but never cashed. Communication will not be enough. 

Compounding the issue, the majority of HELOC owners have additional loans and credit to manage and little discretionary income to work with. The reality is that poor and middle-income homeowners face challenges even without adjusting to higher payments.   

Unless lenders pro-actively write down the balances, there will absolutely be a portion of the borrowers forced into default. No one knows how many, but according to TransUnion, as much as $79 billion of those outstanding HELOC balances could be at elevated risk of default in the next few years. These defaults will create foreclosures– an inevitable conclusion to a big ticket. 

“These resets are a very serious issue.” said Amy Crews Cutis, chief economist at Equifax. “It’s a nontrivial number of people who will get smacked with a higher payment.” 

The HELOC borrowing boom that enabled spending during the last decade is now set to impede our economic recovery, stalling spending, causing defaults and ultimately leading to more foreclosures; a dynamic certainly to take a bite out of the housing market. 

Stats for Seattle Area Not Good: Percentage of Homes Underwater and Delinquency Rates Both Higher Than National Averages

Seattle Short Sales - Wednesday, March 12, 2014
As reported in the Puget Sound Business Journal, nearly one third of homes in the Seattle area are underwater on their mortgages.

The report quotes quarterly figures released by Zillow.com. At the end of the first quarter of 2013, 31% of homes in King, Pierce and Snohomish counties were underwater - in other words, the homeowners owed more on their mortgages than the current value of their home. That represents a very slight improvement from the last quarter of 2012, when 34% of homes were underwater.

The situation is worst in Pierce County, where nearly 43% of homeowners are underwater on their mortgages. Snohomish County is not far behind, with 37% of mortgages underwater. Homeowners in King County, however, are faring much better, with only 24% underwater with their mortgages - slightly better than the national rate of 25% (as well as better than the rate across Washington State of 29%).

However, Zillow also notes that nearly half of homeowners in the Seattle area had little or no “effective equity.” They consider homeowners with less than 20% equity in their home to have no “effective equity,” because if they sell their home, by the time they pay agents’ fees and closing costs, they will see little or no cash out of the deal.

Zillow also noted that the rate of three or more months’ delinquency is slightly higher in the Seattle area than the national average. In the Seattle area, 10% of homeowners are three or more months delinquent, compared to the national average of 9%. Homeowners who are both underwater and who are behind on their mortgage payments are at high risk of being foreclosed upon by their lenders, unless they take action to prevent foreclosure, such as by negotiating a short sale or a loan modification.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/ 

You can also contact Lambros Politis on Google+ or to find more up to date information on this subject, go to the Ark Law Group Blog. 

 

New Revised Guidelines for Washington’s Foreclosure Fairness Program

Seattle Short Sales - Tuesday, March 11, 2014

The Foreclosure Fairness Program (FFP) was created in 2011 by the Foreclosure Fairness Act (FFA). The program is developed and administered by the WA Department of Commerce. The aim of the FFP is to reduce foreclosures in Washington state by encouraging mediation between homeowners who are at risk of being foreclosed upon, and their lenders. Its aim is to avoid foreclosure by exploring alternatives, such as loan modifications or short sales.

Through the FFP, a mediator is assigned who will work with the borrower and the lender to find an alternative to foreclosure that is appropriate to their situation. Specifically, the program guidelines aim to coming up with some sort of loan modification. However, if both parties want to work towards a different solution, such as a short sale, the mediator will work with them at their direction

Much of the value of the FFP is that it slows down the pace of foreclosure, providing defined steps and timelines, so that homeowners may have some breathing space and seek guidance about what alternatives are available to them. The FFP mediation process typically occurs over a 70-day timeline (and that period can be extended if both parties agree to the extension). The FFA states specifically that if a borrower has been referred to mediation after a NOTS has been recorded, that Trustee Sale may not take place until the trustee receives a certificate stating that the mediation has been completed. In other words, lenders may not rush a Trustee Sale without taking the time to fully investigate other options with the borrower through the mediator.

FFP guidelines are updated from time to time, and they were most recently updated by the Department of Commerce this month. Click this link for a complete listing of Foreclosure Fairness Program guidelines updated as of June 6, 2013. Following are some of the highlights of the newly revised guidelines:

  • The FFP is for borrowers with a mortgage for “residential real property,” which means a single-family residence, a residential condominium unit, or a residential cooperative unit.  The home must be the principal residence of the borrower at the time that contact under the FFA was made - however, borrowers remain eligible for mediation even if they move after that initial contact.
  • Second mortgages and home equity lines of credit (HELOCs) may be eligible for mediation under the FFP provided that all other eligibility criteria are met.
  • Borrowers must be referred to the program for foreclosure mediation by a housing counselor or by an attorney. Borrowers who received a Notice of Default after July 22, 2011, are eligible to be referred to the program for up to twenty days after the Notice of Trustee Sale (NOTS) was recorded. The referring housing counselor or attorney must screen the homeowner for eligibility.
  • Mediation fees are set at $400 for a session of one to three hours (including mediator’s preparation time) with an additional fourth hour charged at $130 if necessary. Payment of this fee is split equally between both parties.
  • Some lenders are exempt from mediation through the FFP. These are mainly smaller lenders such as many of the smaller credit unions. The Department of Commerce posts a list of exempt lenders for each year on its website; click here to see the list of exempt lenders for 2013.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/

You can also contact Lambros Politis on Google+ or submit a contact request at Ark Law Group.

How Does a Short Sale or a Foreclosure Affect My Credit Score?

Seattle Short Sales - Thursday, March 28, 2013

Just because you are having trouble paying your mortgage right now, doesn’t mean that you may not want to enter the housing market again a few years down the road. Smart homeowners who are looking to get rid of their current mortgage debt know that the decisions that they make now will affect their future. One of the things that they consider when assessing solutions (negotiating a short sale, filing bankruptcy, or simply awaiting foreclosure) is how their choices will affect their credit score, and their ability to get new financing.

The credit-reporting agencies (Experian, Transunion, and Equifax) are notoriously tight-lipped about how they calculate credit scores. How a short sale or a foreclosure will affect your credit score depends upon a number of things, including what your credit score was before the short sale or foreclosure (higher scores tend to fall further), and, especially, whether you were delinquent on mortgage payments before the short sale.

Since the credit-reporting agencies do not release their formulas, most of the information available is more “anecdotal” - from blogs and discussion forums. Much of the older information (as in two or more years old) indicated that the hit to a credit score from a short sale was about the same as the hit from a foreclosure on record. However, things have changed lately!

Much of the actual credit score hit was due to the mortgage payment delinquency. Mortgage delinquency is what leads to a lender initiating a foreclosure, so the two go together. It used to be that a borrower had to be delinquent on mortgage payments before most lenders would even look at a short sale request. However, these days, most lenders will consider a short sale request by a borrower who has not yet missed any mortgage payments. In particular, if that borrower can demonstrate to the lender that they are “at imminent risk of default” - i.e. that changed circumstances (e.g. unemployment, increased medical expenses) mean that the borrower will default soon if nothing is done.

This means that, these days, it is possible to do a short sale without ever becoming delinquent, or, in the case of some short sale programs, being only one month delinquent.

For a borrower who has remained current on mortgage payments, the “hit” of a short sale on their record can be as little as 60 points, or even less, and it may remain on record for as little as 12 to 18 months. For borrowers who were behind on mortgage payments when they did the short sale, the hit may be more like 100 points or more. In contrast, a foreclosure may cost the borrower between 250 and 300 points. A foreclosure remains on the borrower’s record for seven years.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/

You can also contact Lambros Politis on Google+ or to find more up to date information on this subject, go to the Ark Law Group Blog. 

Foreclosures Dropping Nationwide - But Washington State Has Become New “Foreclosure Hot-Spot”

Seattle Short Sales - Friday, March 15, 2013

Foreclosure are dropping nationwide, reports RealtorMag this week - but the news is not so good for Washington State. RealtorMag calls Washington one of the “new foreclosue hot-spots,” as it moved up to being the state with the fifth-highest foreclosure rate.

Florida and Nevada still top the list (with Illinois and Ohio in third and fourth place) but Washington has now overtaken Arizona, which has the sixth-highest foreclosure rate, and is far ahead of California, which dropped off the top-ten list for the first time since 2006.

RealtyTrac has published a map that shows the foreclosure rate in each state for February 2013. In Washington, one in every 656 housing units received a foreclosure filing in February (for a total of 4,362 foreclosure properties). This compares to the high rate in Florida, of one in every 282 properties, and to the lower rates in other northwestern states (Oregon, one in every 1,752 properties; Idaho, one in every 1,101 properties; and Montana, a very low one in every 10,864 properties).

RealtorMag quotes RealtyTrac vice president Daren Blomquist as saying that many of these foreclosure starts “will likely end up as bank repossessions or short sales later this year.”

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/ 

You can also contact Lambros Politis on Google+ or to find more up to date information on this subject, go to the Ark Law Group Blog. 


 

Tenants’ Rights Following Foreclosure or Short Sale of their Rented Home: Part 2

Seattle Short Sales - Wednesday, March 13, 2013
This article is Part 2 of a two-part series about the rights tenants have when the home that they are renting is threatened with foreclosure. Part 1 explained tenants’ rights when foreclosure is pending. This instalment looks at how much notice must be given to tenants to vacate the home in the case of a short sale, or following foreclosure and a Trustee Sale.

The regulations governing how much notice renters must receive to vacate is different for a property that has been foreclosed upon than it is for a property that has been sold (including through a short sale). Here is some general information regarding the regulations in Washington State, and on the rights and obligations of tenants:

Eviction following foreclosure:

Within the context of a foreclosure, the 20 days-notice to vacate is not applicable. Following a foreclosure trustee sale and after the transfer of the property to a new owner, regardless of whether it’s a fixed-term or month-to-month lease, the new owner may give notice to the tenants to vacate.

Washington State law requires a new owner to given tenants a minimum of 60 days notice to vacate, but this is effectively superceded by federal law, which requires a minimum of 90 days notice. These timelines apply only to the case of a new owner following foreclosure and a Trustee Sale. As a tenant, you must choose whether to take the 60 days notice, or assert your federal right for the 90 days notice - because you receive different benefits depending upon which you choose.

If you intend to continue occupying the home for the full 90 days, you should let the new owner know that that is your intention. Since you are asserting your right to occupy under federal law, you must also obey  federal law, which requires you to continue paying rent. You are also required to meet any other obligations specified under the original lease contract.

However, if you only intend to occupy the property for the 60 days specified by state law, the state law mandates that you cannot be evicted for failing to pay rent. In effect, you may continue to occupy the property for free for up to 60 days following foreclosure. (You still could be evicted during this period for committing waste or nuisance, however). If you stay beyond the 60 day “free” period, the new owner may file suit against you and force the eviction through an unlawful detainer action. You don’t want that eviction to come up during a background check in the future when apartment hunting.

You can, of course, always decide to sign an updated lease with the new landlord if that is presented to you as an option following foreclosure. 

Eviction following a short sale:

When the property changes hands through a normal real estate transaction or though a short sale, the new owner enters into the same lease agreement with the tenants as the previous owner had. The previous owner transfers the security deposit that the tenants paid to the new owner. In other words, the prior lease agreement is binding on the buyers.

If the rental agreement is on a month-by-month basis, according to Washington State law, the landlord must give the tenants a minimum of 20 days notice to vacate. If the 20 days are within a rental period that the tenant has already paid rent for, the tenant may be due a pro-rated partial rent refund.

If the rental agreement is for a fixed time period, the new owners must honor that agreement. 

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/

You can also contact Lambros Politis on Google+ or to find more up to date information on this subject, go to the Ark Law Group Blog. 

Tenants’ Rights Following Foreclosure or Short Sale of their Rented Home: Part 1

Seattle Short Sales - Monday, March 11, 2013

This article is Part 1 of a two-part series about the rights tenants have when the home that they are renting is threatened with foreclosure. This instalment discusses tenants’ rights when foreclosure is pending. Part 2 of this series will look at how much notice must be given to tenants to vacate the home in the case of a short sale, or following foreclosure and a Trustee Sale.

Not all underwater homes are owner-occupied. In many cases, homes that are threatened with foreclosure are rentals. How does the prospect of foreclosure affect tenants who are living in an underwater rental home?

The impact on tenants ultimately depends upon how the property owner chooses to deal with the threat of foreclosure, and how much they choose to communicate with the tenants about the situation.

Pending foreclosure:

If a property is going into foreclosure, according to recently passed Washington State law, the Trustee is required to give tenants of a rental property facing foreclosure a minimum of 90 days notice before the foreclosure sale date.The Trustee was already required by law to post notices of the foreclosure on the property, but the new law requires them also to mail notices of the foreclosure sale to the tenants. This foreclosure notice is not an eviction notice; it is simply to make sure that the tenants are informed about the situation.

A landlord who is facing foreclosure may choose to try to do a short sale, in order to avoid being foreclosed upon. It is generally easier to sell a property with tenants who are on a monthly lease than on a fixed-term lease, because the tenants can be evicted with 20 days notice if they are on a monthly lease; this makes the property more attractive to any potential buyer who intends to occupy the home.

For this reason, if tenants are on a fixed-term lease, landlords might approach them about converting to a monthly lease in exchange for an incentive of reduced rent. Tenants are not required to change the terms of their lease if they do not want to, but the reduced rent offered may make it worth their while to do so.

Tenants requesting a short sale:

Receiving notice that the home you are renting is facing foreclosure may open the possibility for some tenants to purchase the property as a short sale. If you are a tenant and are in the position to obtain financing, this is an opportunity not only to avoid having to move, but to purchase a home at a discounted price.

Most lenders will consider allowing a tenant to purchase a home that they are foreclosing on as a short sale, because lenders usually will recover more from their bad mortgage through a short sale than they will through the long process of foreclosure - especially a short sale with an interested buyer already in place. The landlord will also usually be open to a short sale, as it will be a faster solution, as well as much easier on their credit rating, than foreclosure would be.

If you would like to purchase the home that you are renting as a short sale, you should contact your landlord, the owner, as soon as you are aware that the property is in trouble. The sooner you get the short sale process started, the more likelihood you will have of succeeding with the deal.

The second instalment of this series will explain how much notice to vacate a property the owner (or new owner) is required to give tenants: prior to foreclosure, following a short sale, and following foreclosure.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/ 

Dual-Tracking: Can my Lender Continue Foreclosure Proceedings While I Negotiate a Short Sale?

Seattle Short Sales - Thursday, March 07, 2013

The National Mortgage Settlement of February 2012 provides for relief and compensation to borrowers who lost their homes to foreclosure, and for some borrowers who are threatened with foreclosure. However, it does not have provisions to help everyone. One common misunderstanding of what the terms of that mortgage settlement mean is with respect to dual-tracking: where lenders continue with foreclosure proceedings even while a loan modification or short sale is being negotiated.

The National Mortgage Settlement has a provision in it that forbids lenders from dual-tracking - but this provision applies only to loan modifications. Banks may not foreclose on a homeowner while they are under consideration for a loan modification. However, there is no proviso that prohibits banks from proceeding with foreclosure while the homeowner is working on negotiating a short sale.

The wording is confusing - the "no dual-tracking" provision may make it sound like this also applies to short sales - so some lenders have been working to clear up any confusion. In January, Bank of America sent a notice out to short sale agents specifying: “As of January 15, 2013, there will no longer be a temporary foreclosure hold during the Cooperative Short Sale property marketing phase. We may begin or continue the foreclosure process up until a submitted offer to purchase the property is approved by all relevant parties.”

The terms of the Settlement state only that the lender/servicer may not proceed with foreclosure if the short sale has been approved by all parties. Two cautionary notes here are:

  • this means that they may proceed with foreclosure even while a short sale is being negotiated
  • this provision only applies to the five servicers who are party to the National Mortgage Settlement: Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo.

Other lenders may still continue to dual-track foreclosure proceedings, even though a short sale is being negotiated and is close to approval - or even approved and about to close! For example, this short sale approval that we negotiated in February with Ocwen, a lender that is not party to the National Mortgage Settlement, states in its first paragraph “Ocwen will NOT postpone a scheduled foreclosure sale, even if there is a pending sales contract.”

The take-away is to be efficient with short sale negotiation: do all that you can to make the process move forward quickly. A lender’s foreclosure department may not even be in contact with their short sale department - so pay attention to any foreclosure notices, such as demand letters or Notice of Trustee Sale communications, even if you have a short sale in the works. If there is a Trustee Sale scheduled, make sure that your short sale will close before that sale date.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/
 

Fannie Mae Makes the Moves for Even Faster Short Sales

Seattle Short Sales - Sunday, February 17, 2013

The trend continues: Lenders do not want to foreclose on you. Foreclosure is not only undesirable for struggling homeowners trying to deal with underwater properties. Foreclosure is a costly way for lenders (including both loan servicers and investors) to deal with non-performing mortgages. Short sales are an alternative to forelosure, and this week, Fannie Mae announced a new tool to make the short sale process even faster and easier.

Some of the issues that can slow down a short sale approval include:

  • needing guidance for a recommended listing price for the property
  • disputing the BPO (Broker’s Price Opinion), or fair market value of the property
  • delays in hearing back from the loan servicer (bank)
  • stumbling blocks between parties during negotiation of an offer.

If a short sale case has come up against one of the issues listed above, the new Fannie Mae tool, called Home Path For Short Sales, allows selling agents to escalate the short sale case. When agents escalate the case, Fannie Mae will contact the servicer to address the issue that is stalling the short sale process. According the DSNews, agents who have used the Home Path For Short Sales tool to escalate cases saw results within one to two days.

Fannie Mae’s new Home Path For Short Sales tool continues the trend that we have been seeing in the last twelve months, as lenders and servicers turn increasingly towards short sales for loss mitigation. Late last year, new FHFA guidelines were announced that will streamline the short sale approval process . In addition, a few weeks ago, Freddie Mac released information about its “shorter short sale” approval process.

To find out whether a mortgage loan is owned by Fannie by visiting https://www.knowyouroptions.com/loanlookup. And find out more about Fannie’s new Home Path For Short Sales tool at http://www.homepathforshortsales.com/.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/
 

Not Prepared to Give up Your Home Through Foreclosure or a Short Sale? Then Consider a Loan Modification.

Seattle Short Sales - Thursday, January 31, 2013

We have noticed, over the years, that many loan modifications that struggling homeowners have attempted end up failing. Many borrowers who have come to us to negotiate their short sale actually started out by trying to work with their lenders to negotiate a loan-mod. After months of negotiation (or, in some cases, years!) they either were denied the loan-mod, or they were granted a loan-mod with terms that did not help them in the end.

However, this doesn't mean that the idea of getting a loan modification is necessarily bad. In many cases, it means that the negotiation process was not carried out effectively. For many homeowners, a short sale is the fastest and surest way to permanently rid themselves of mortgage debt that they can no longer afford. However, for others, keeping the family home if at all possible is their top priority. They are not prepared to give up their home, whether through a short sale or through foreclosure, without a fight. For them, negotiating more favorable mortgage terms through a loan modification may be the key to keeping that home.

Unfortunately, we have heard countless tales from our short sale clients of how they spent months, or even years, trying to negotiate a modification with their lender - with no success. Problems that led to their modification failing to get approved range from lenders repeatedly losing paperwork, to lenders continually changing terms or eligibility requirements or submission documents.

We’ve also heard from many homeowners who did manage to negotiate modifications - only to find out the hard way that they cannot meet the obligations of the new loan terms. Often, the new payments still end up being more than the homeowners can afford on the long term, and they end up re-defaulting a year or so later. And, believe it or not, in some cases, the new payments actually end up being higher than the original loan payments!

We've decided to apply our years of experience in facilitating negotiations between struggling homeowners and their lenders to the field of loan modifications too. We want to help struggling homeowners negotiate loan-mods that will actually help them. Everyone’s situation is unique, and there is no single solution to financial troubles that works for all. Our experienced case managers review each homeowner’s situation individually. We look at the pros of all possible solutions - loan modification, short sale, bankruptcy - and our professionals work with our clients all the way, from making the important decisions and making a plan, to carrying out that plan.

We now have an attorney on staff who is dedicated to loan modifications. We look forward to this expansion in our services - so we can review each homeowner's unique situation carefully and offer all options to them.

Our plan is to focus on residents of Washington State who have recently received a Notice of Default (NOD). We will then file immediately for mediation, under Washington’s Foreclosure Fairness Act. Filing for mediation typically stops the foreclosure in its tracks. It allows us time to review the homeowner’s situation, and come up with an appropriate solution. If a loan modification is the best solution, this allows for a very manageable loan modification process, where we work directly with the beneficiary of the borrower’s note.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/


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