1) Short Sale
A short sale allows the homeowner to avoid foreclosure,
minimize financial damage and move on from a
burdensome, unaffordable mortgage. In many cases,
a short sale allows the borrower to qualify for a new
mortgage in just 24 months, as opposed to five years or
more after a foreclosure.
A trained real estate agent can negotiate a short sale
with your lender if you have three qualifications. First, you
must show some type of financial hardship. Second, you
must have a monthly shortfall, meaning your monthly
expenses are greater than your monthly income. Finally,
you need to prove that your debts are greater than the
value of your assets (certain investments, property, etc.).
A reinstatement is the simplest solution for a foreclosure,
however it is often the most difficult for homeowners
to achieve. The homeowner simply pays the total
amount past due (including late fees) to the lender.
This solution does not require the lender’s approval and
will “reinstate” a mortgage up to the day before the
3) Forbearance or Repayment Plan
A forbearance or repayment plan involves negotiating
with the mortgage company to allow the homeower
to repay back-payments over a period of time.
The homeowner typically makes current mortgage
payments in addition to a portion of the back-payments
owed. This option requires lender approval.
4) Mortgage Modification
A mortgage modification involves the reduction of
one of the following: the interest rate on the loan, the
principal balance of the loan, the term of the loan, or
any combination of these. These changes require lender
approval and typically result in a lower payment for the
homeowner and a more affordable mortgage.
5) Rent the Property
This option does not require lender approval, but does
require the homeowner’s ability to rent the house
for enough money to cover the monthly mortgage
It is important to remember that there may be
unexpected costs associated with the maintenance
of a rental property in addition to the monthly
mortgage payments. Homeowners should take this into
consideration when deciding whether this option will
work for them.
6) Deed-in-Lieu of Foreclosure
Also known as a “friendly foreclosure,” a deed-in-lieu
allows the homeowner to return the property to the
lender rather than go through the foreclosure process.
Lender approval is required for this option, and the
homeowner must also vacate the property. Deed-in-lieu
can potentially lessen the damage to a credit score
and future loan eligibility, and sometimes the lender
will forgo their right to pursue a deficiency judgment,
meaning the homeowner will not be responsible for
Many have considered and marketed bankruptcy as a
“foreclosure solution,” but this is only true in some states
and situations. This does not require lender approval,
but you must have non-mortgage debts that you claim
as a hardship.
Entering bankruptcy can be a risky and costly process.
Be sure to seek the advice of a qualified bankruptcy
attorney when pursuing this as an option.
As opposed to mortgage modification, refinancing
means you will be acquiring a new loan based on your
current credit standing. If you have already missed
mortgage payments, your credit score may make it
difficult to find a loan with cheaper payments.
9) Servicemembers Civil Relief Act
(military personnel only)
If a member of the military is experiencing financial
distress due to deployment—and that person can show
that the debt was entered into prior to deployment—he
or she may qualify for relief under the Servicemembers
Civil Relief Act. The American Bar Association has a
network of attorneys that will work with servicemembers
to help qualify them for this relief.
10) Sell the Property
Homeowners with sufficient equity can list their property
with a qualified agent who understands the foreclosure
process in their area. Unfortunately, many homeowners
in today’s market have experienced a decline in home
value and may owe more than what the home is worth.
IDAHO SHORT SALE(S)...
A Idaho Short Sale is when your lender agrees to take less money than what is owed to them due to a hardship on the part of the seller.
What is a Hardship?
The underlying reason behind most delinquent mortgage payments is what the mortgage industry defines as a “hardship condition.” A hardship condition is basically an unexpected financial crisis of some sort.
HUD recognizes the following situations as valid hardships and reasons for default:
Death of a principal mortgagor
Death of Mortgagors Family member
Illness of principal Mortgagor
Illness of Mortgagors Family member
Decrease of Income
Inability to rent Property
Distant Employment Transfer
Will the bank come after me for the difference?
During the short sale process, I can negotiate with the lender to not seek a deficiency judgment against the homeowner. There is a second issue as it relates to the deficiency and the infamous 1099. When you complete a Idahoshort sale the lender will report that loss to the IRS. If this is your primary residence the IRS will NOT tax you on the deficiency. Please see this link for more information.
What about my Credit? How does a short sale benefit me?
The big key here is to AVOID Foreclosure. By nearly any measure, a foreclosure is the most damaging event a credit status can encounter- worse than bankruptcy. In the course of getting your short sale approved you may miss your mortgage payments, and these will show on your credit. Credit scores drop on average 100-200 points, but you can repair your credit in a reasonable time frame. Lenders will also allow you to stay in your home even though you cannot make your payments until a short sale is finalized.
I am current on my mortgage; will my lender consider a short sale?
Yes. The lender will not only look at your current financial information, but also look at what lies ahead in the upcoming months.
Why would a mortgage company agree to accept a short sale?
Foreclosures are costly to lenders- foreclosures are time consuming they require maintenance of the property, keep utilities on, and interest and legal fees can be very high. With as many foreclosures/REO’s as the banks own these days the last thing they want is another foreclosure.
The Idaho Short Sale process:
Acquire the services of a knowledgeable Realtor who is a Idaho Short Sale Specialist and a knowledgeable attorney, if necessary.
Sign an "Authorization Letter" which authorizes your Idaho Short Sales Specialist to begin negotiations on your behalf. This authorization will not change the terms of your loan, it simply allows your representative to negotiate on your behalf. A complete financial statement will also be required which is a snapshot of your financial condition.
Prepare a "Hardship Letter" which outlines the reason you are unable to make the monthly payment obligations and what other factors will keep you from making future monthly obligations.
Your lender will request a broker price opinion from your representative which includes condition of your home, comparable sold properties, and the overall condition of the current real estate market.
A HUD settlement statement outlining the proposed selling price and all associated costs is provided by your representative.
The lender will look at any offers made by ready, willing and able buyers and see if the offer makes economic sense compared to allowing foreclosure.
If your lender decides the short sales process is the best avenue available they will approve your proposed short sale and schedule the final process with your representative.
Elements of a Short Sale in Idaho (required from homeowner)
Income Tax Returns
Other Documents (required by lender)
Hiring a Idaho Short Sale Specialist
In most cases if you can keep your home from going to foreclosure you will be in a much better position to buy another home within 3-4 years depending on the type of loan you had on the short sale property. I am a IdahoShort Sale Specialist. I have the experience it takes and I have made a heavy investment in specific classes on all facets of the short sales process. There are so many things that go into a successful closing on Idaho Short Sales. I offer free consultation with you to discuss whether or not a Idaho short sale is the best option for you and your family. My services won’t cost you a penny! Fees are paid upon successful negotiation on the sale of your property by your lender(s). If you want to know if you are eligible for a Idaho short sale, please contact me. The sooner you call, the more options we have. I will assist you in a professional, confidential, and non-judgmental way. I am here to help you AVOID foreclosure!
If you want to know if you are eligible for a short sale, please contact me. I will assist you in a professional, confidential, and non-judgemental way. I am here to help you avoid foreclosure!
If you have a property that needs to sold as an Idaho Short Sale, please contact me and I will get the paperwork right out to you!
Why would a lender want to accept an Idaho Short Sale? Foreclosure is a time-consuming and expensive process for lenders. Many times, lenders recognize that if they accept the short sale, their company will actually loose LESS money than if they foreclose on the home. It is better for their bottom line.
Are all homes eligible for a Short Sale? No, there must be a "hardship", or some reason that you cannot continue to make the payments on your home. Also, there are many different lenders, and each one has different criteria for which Short Sales they will accept.
Does the homeowner have to re-pay the "short" amount? Sometimes the lender will require a homowner to sign a note for all or some of the deficit amount. It is based on your ability to pay. Signing a note however, is a much better situation than having a foreclosure on your credit history.
Do I have to be behind in my payments? NO, not necessarily! Each lender is different, and each short sale is based on your financial situation. If you won't be able to continue making your payments, call to find out. Taking action sooner is always better, then not and letting your home go to foreclosure!