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.

Debt Settlement Part 2: Two Real-Life Examples of Creditors Accepting Much Less Than The Total Balance Owing

Seattle Short Sales - Thursday, March 13, 2014

This article is Part 2 of a two-part series on debt settlement. In the first article, we looked at the differences between debt consolidation and debt settlement. In this second article, we examine two recent cases of clients whose debts we have settled by convincing their lenders to accept thousands of dollars less than the balances owing.

Here are two recent cases where we settled our clients’ debts for less than the total amount owed (their names have been changed). The first case involves a $58,000 unsecured debt resulting from the deficiency owing on a second mortgage following a short sale.

David was diagnosed with a degenerative medical condition that would require multiple costly surgeries. He knew he would not be able to continue to pay the mortgages on his Seattle home, and we assisted him in avoiding foreclosure by negotiating a short sale with his lender.

Following the short sale, Wells Fargo relieved him of having to repay the $95,000 deficiency balance remaining on the first mortgage. But Wells Fargo refused to forgive the deficiency balance on the second mortgage, leaving David with with a $58,000 debt on a home that he no longer owned.

He met with a bankruptcy attorney to investigate the possibility of filing bankruptcy. Then he came to us, and met with our debt settlement attorney. Our attorney offered Wells Fargo a cash payment of $8,900 to settle the debt permanently, and Wells Fargo accepted!

Our client was able to permanently settle his financial obligation by paying only 15% of the total $58,000 owed. Without resorting to bankruptcy, he was completely absolved of any further debt relating to the home that he’d had to give up, and able to direct his attention to the future and to raising his young family.

Our second case involves a judgment lien. In this case, our client wanted to do a short sale, but she could not get the sale approved because she had an old debt that had been sold to a debt collector who had placed a lien on the home.

Maria was successfully self-employed when she purchased her home in Lynnwood, WA. However, between the slow economy causing a substantial reduction in her income, and a recurring illness that forced her to take time off work and pay for a surgery, by the end of 2012 she realized she would no longer be able to afford her mortgage payments.

She wanted to avoid foreclosure by negotiating a short sale with her lender. However, an old debt that she had had for $5,500 had been sold to a debt collector, and they had placed a lien on her home. She could not sell the home unless that lien was released.

We negotiated with the debt collector, and they agreed to accept $3,000 as full and final settlement of the debt. The lien was lifted, Maria was able to sell her home, and she was relieved of ever having to repay the remain $2,500 owing to her creditor.

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 theArk Law Group Blog. 

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 Cenlar Short Sale Approval Letter: Homeowners in Seattle, WA, Receive $146,000 Loan Discount, Deficiency Waived!

Seattle Short Sales - Wednesday, October 31, 2012
These Seattle, WA, homeowners avoided foreclosure through a short sale. They owed nearly $290,000 on their Cenlar mortgage, including arrears. They relocated to California in April, 2011 - at which time their home was valued at more than the balance owing. But rapidly dropping property values meant that, by the time their home was on the market, its value had dropped to less than their mortgage debt.

They could not afford to pay both their rent in California and their mortgage in Seattle. Their only hope to avoid foreclosure was to negotiate a short sale with Cenlar.

Cenlar has just issued their approval letter for the short sale, accepting $142,528 net proceeds on the $288,400 mortgage balance owing - a discount of $145,872. The short sale approval letter waived the Seattle homeowners of ever having to repay that deficiency.

You can read the Cenlar short sale approval letter here: 9.12.12_Cenlar_1st_Lien_146k_Deficiency_Debt_Settled_Short_Sale_Approval.pdf

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

Real Estate Sales and Prices up in King, Snohomish Counties - Seattle

Seattle Short Sales - Tuesday, August 28, 2012

A report published in the Bellingham Herald this weekend indicated that the real estate market is improving in the greater Seattle region - but that home sales in the rest of Washington state are just “sputtering along.”

Snohomish County leads the way in both number of sales and in prices, with second-quarter sales of existing homes up 23% from the same period a year ago, and the median sales price up by 8.2%.

King County also showed marked improvements from a year ago, with home sales up by 17.2% and the median sales price up by 6.5%.

Although the number of home sales increased statewide by 10.4% over the previous year, the Bellingham Herald quotes Runstad Center for Real Estate Studies (University of Washington) associate director Glenn Crellin as expressing caution at this apparent positive trend.

Crellin notes that, even though home sales increased over the 12 months, the seasonally adjusted rate actually dropped from the first quarter of 2012 to the second quarter - which means the pace of that upward trend is decreasing.

Crellin believes that the market has actually been suffering from a shortage of properties. With property prices increasing, at least in the greater Seattle area, this may be a sign that the bottom of the market has been reached.

However, there are currently around 80,000 mortgages in Washington state that are either more than 90 days delinquent, or already in foreclosure proceedings - and that number does not include the number of properties that have already been foreclosed upon. All of these properties will come on the market at some point, and the real estate market in Washington will not be able to truly recover until that REO inventory has been substantially decreased.

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

New Ocwen Short Sale Approval Letter: Homeowners in Seattle, WA, Receive $343,000 Loan Discount, Deficiency Waived!

Seattle Short Sales - Sunday, July 22, 2012
This Seattle, WA, homeowner and business owner earned high income from various business interests - up until 2007. The economic downturn caused him to lose his contracts. In the following years, he and his wife incurred $100,000 in other debts while trying to service their mortgage - but their business was not turning around.

By 2012, they owed $975,000 on their Ocwen mortgage. But their home was valued at only $700,000. They avoided foreclosure through a short sale.

Ocwen has just issued their approval letter for the short sale, accepting $632,000 net proceeds on the $975,000 mortgage balance owing - a discount of $343,000. Furthermore, Ocwen’s short sale approval letter waived these Seattle homeowners of ever having to repay that deficiency. They can move into their retirement years free of mortgage debt.

You can read the Ocwen short sale approval letter here: 6.28.12_Ocwen_1st_Lien_343k_Deficiency_Debt_Settled_Short_Sale_Approval.pdf

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

Homeowner Lost Hope on Getting Short Sale Approved - But We Didn’t!

Seattle Short Sales - Wednesday, June 06, 2012

This just in from one of our satisfied short sale clients, who had actually given up on being able to avoid foreclosure by US Bank on her Seattle home:

“My experience with Seattle Short Sales was great. My Case Manager was extremely helpful in explaining questions I had, and I felt like someone was holding my hand through the difficult process.
“I had met with my real estate attorney, who told me their firm would not take my case since the chances my bank would work with me were slim. However, Seattle Short Sales was able to help me by coming to a suitable agreement with the bank even if it meant resubmitting my file several times.
“I was finally approved for my short sale on the 4th round.
“I had given up, but Seattle Short Sales had not. I cannot thank them enough for helping me through this period of distress.”

Short sales are complicated deals, with many players having a stake in the outcome: the seller, the buyer, the lender (both the loan servicer and the actual investor), the buyer’s agent, the seller’s agent, and often a few attorneys too.

While many of our competitors will outright reject all but the easiest cases, telling the struggling homeowners that there is little hope of them to be able to negotiate a short sale with their lender, we will take on any case: all files, and with all lenders.

Since the beginning of 2010, we have negotiated over 700 short sale approvals. That is nearly one short sale approval letter every day! That case volume, and our policy of working with all lenders rather than cherry-picking only the easiest ones to deal with, means that our Case Managers are among the most experienced short sale negotiators you will find anywhere. We have seen it all - and we use that wealth of experience so that we can provide the individual attention and service that every homeowner considering a short sale  deserves.

In the case mentioned above, the homeowner, who was very financially responsible, was facing increased living expenses. Her home, currently valued at $110,000, was not worth enough to pay off the $251,000 she owed on her mortgage. Although she had not yet defaulted on the loan she realized that, with her increased living expenses, she soon would. She wanted to deal with this before it got any worse.

She met with an attorney, and he told her that she had little hope of getting a deal. He outright rejected her case. So she came to Seattle Short Sales, Inc.

Her case was definitely not an easy one. Her mortgage was with US Bank - one of the more difficult lenders to obtain short sale approvals from. Additionally, although she was facing increased living expenses, it was hard to know whether or not the lender would consider that to be “hardship” (as compared to loss of employment, or medical expenses). But we took the case.

Our Case Manager submitted the file to US Bank - three times! - and the short sale request was declined each time. The bank’s reason? They deemed her to have “no hardship.”

So our Case Manager met with both the buyers and sellers, and they decided to let the file sit for at least a month, while the Case Manager compiled revised and updated financial documents. Then the file was resubmitted for a fourth time, a new negotiator reviewed it, and it was approved!

The results for our seller?

  1. She had managed so far to stay current on her mortgage. She wanted to preserve her good credit rating by not defaulting on the loan, and to avoid foreclosure by short-selling the home. She achieved both.
  2. From the sales funds, she was able to pay off $96,000 of the $251,000 loan balance, and she signed a promissory note to pay her lender an additional $13,000. This means she paid a total of $109,000 on the $251,000 mortgage balance owing - a discount of $143,000!
  3. Perhaps best of all - her lender waived her of ever having to pay back that $143,000 deficiency balance! This means that she is now clear of debt, and free to start rebuilding her life.

To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=106507

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

New Wells Fargo Short Sale Approval Letter: $141k Deficiency Waived for this Seattle Homeowner!

Seattle Short Sales - Wednesday, May 23, 2012
Great news for this Seattle, WA, homeowner! Not only did he avoid foreclosure through a short sale, he also had the $141,000 deficiency balance waived.

He owed over $215,000 on his Wells Fargo mortgage, as well as another $31,910 in arrears - a total of $247,000 of debt. But his home was valued at only $124,000.

Wells Fargo issued an approval letter for the short sale, accepting $106,000 net proceeds on the $247,000 mortgage balance owing - a discount of $141,000. However, the approval letter did not waive the deficiency - which means that down the road, debt collectors could pursue our Seattle homeowner to repay that deficiency.

We had our lawyer write a letter to Wells Fargo, explaining to them that if they did not waive the deficiency balance, they would end up owning the home outright (and have to absorb all of the costs of marketing it) - either by the homeowner declaring bankruptcy and not having to repay the deficiency, or through foreclosure.

Wells Fargo promptly reissued the short sale approval letter, waiving the Seattle homeowner of having to repay the deficiency balance.

You can read the original Wells Fargo short sale approval letter here: 4.25.12 - Wells Fargo - 1st Lien - 141k Deficiency - Lien Release - Short Sale Approval

You can read the revised Wells Fargo short sale approval letter, waiving the deficiency, here: 5.16.12 - Wells Fargo - 1st Lien - 141k Deficiency - Debt Settled - Short Sale Approval

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

Mortgage Delinquencies Drop Nationally - But Still Rising Here in WA

Seattle Short Sales - Thursday, May 10, 2012

Good news on the national front regarding mortgage payment delinquencies - but, as usual, the Seattle area and Washington state seem to be lagging behind the national trends.

According to a new report by TransUnion, as published in the Silicon Valley Mercury News, the percentage of homeowners who are 60 or more days delinquent on their mortgage payments dropped in the first quarter of 2012. The nation-wide delinquency rate is now at its lowest level since 2009.

But that drop is small. The national delinquency rate was 5.78% for the first three months of this year - down from 6.19% a year ago. Before the housing crash, the delinquency rate was about 2%, and it peaked at nearly 7% in late 2009.

Throughout this housing crisis, though, Washington state seems to lag behind national trends. As the national delinquency rate declines, there are only eight states where the delinquency rate is still increasing: we in Washington are one of those eight.

The regions that were hit hardest and earliest by the financial crisis and high foreclosure rates are showing very strong signs of recovery. A report published this week by HousingWire, using figures published by Move Inc., lists the regions that show the “top turnarounds.” These are the towns showing the highest level of housing market recovery, as reflected by declining inventory and increasing house prices. Those top turnaround towns include Phoenix-Mesa in Arizona; Orlando, Florida; and Oakland and San Jose in California - all of which have already been hit hard by foreclosures.

We are confident that Washington state and the Seattle real estate market will also follow those same trends and see recovery in the housing market. We just seem to continue to be a year or two behind the national trend.

As delinquency rates are still on the rise here, homeowners who are struggling to make their mortgage payments will continue to look for solutions such as short sales, in order to avoid foreclosure and the negative affects that mortgage payment delinquency will have on their credit rating.

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

First Quarter 2012 Report: We’ve Relieved Distressed Homeowners of Nearly $12 Million of Mortgage Debt Through Short Sales This Year!

Seattle Short Sales - Monday, April 30, 2012

Spring and fall are the busy times for us, and spring 2012 is no exception to that. Short sales are booming - as we reported to you earlier this month, short sales have now outpaced foreclosures. We have just finished putting together the figures for last month: in March, 2012, we managed to negotiate $3,951,000 of loan discounts from lenders for our short sale clients.

The discount, or deficiency, is the difference between what the homeowners owes on the mortgage, and how much she or he is able to pay back on that loan following the short sale. Many homeowners whose home is now worth less than the balance owing on their mortgage may worry that they will never be able to get out of debt. But this March, sixteen of the thirty short sales we negotiated were for loan discounts of over $100,000. And nearly all of those homeowners - twenty six out of the thirty - had the deficiency balance waived. This means that that loan discount is permanent: the lender has put it in writing that they will never pursue the seller to pay it back.

Total debt discounts that we negotiated through short sales in January was $3,370,000, and in February was $4,390,000. Adding March’s $3,951,000 to those figures brings us to a total of $11,711,000 of mortgage relief that we have negotiated for distressed homeowners through short sales for this first quarter of 2012.

All of our short sale approval letters are posted on line: http://seattleshortsales.com/approvals.htm. Here you can see what a real approval letter looks like, what each loan discount is, and how different lenders word a deficiency waiver.

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

Good News, Especially for Seattle: House Prices Up, Inventory Way Down!

Seattle Short Sales - Wednesday, April 18, 2012

Could it be that things are finally starting to look up? There is some good news this week from Realtor.com - especially for Seattle. Stats from March indicate that the nationwide median list price for homes has increased by 5.56% over March 2011. And the inventory of homes listed for sale has dropped by 21% nationwide over the same period.

But the numbers for Seattle-Bellevue-Everett are even better! Median home prices have increased by 4.98% over the past 12 months - only slightly less than the national average increase. But inventories here have dropped dramatically - by more than 39% compared to a year ago.

The median age of our inventory here in the Seattle area has also dropped by 31% over the last year, to 53 weeks. This is also much better than the national average, where the median age of inventory is 89 weeks, a 20% drop from the previous year.

These numbers are all very promising indicators that the housing market is beginning to recover - nationwide, but even more so here in Seattle. The remarkable drop in inventory here can be expected to tighten the market, create more competition and, consequently, raise home prices.

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/


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