Understanding the Short Sale Process

WHAT IS A SHORT SALE?  A short pay is a negotiated settlement that the lender or lenders may accept in lieu of the total amount owed to pay off a loan as an alternative to foreclosure.  Many times we can convince a bank/lender that they will be "better off" if they take a short sale now rather than getting the property back by foreclosure and trying to sell it later with extra additional costs and expenses.

HOW MUCH TIME DOES IT TAKE?  The short pay discount negotiation process can be a lengthy one.  It could take between two and six months to get an approval.  Many lenders have several layers of red tape that we will have to jump through in order to get an approval.  So please be patient and understanding during this process as we will be pushing as hard as e can to get the needed approvals.

HELP!  MY HOUSE IS GOING TO FORECLOSURE, IS THERE ENOUGH TIME?  Sometimes, and sometimes not, just starting the negotiations will not automatically put a stop to foreclosure.  However, many times we can convince a lender to pause the foreclosure to let us attempt to negotiate the short pay.  Therefore, while there are no guarantees, it does not hurt to step up to the plate for one last swing.

WHEN DO I NEED TO MOVE?  The purpose of a short sale is to get the needed discounts from the lender(s) so that the property can be sold before the foreclosure auction.  One way or the other, you will be moving.  The sooner you can move, the easier it will be for us to find a buyer.  It is much easier to sell a vacant house! 

ARE THERE ANY PROMISES OR GUARANTEES THAT THIS WILL WORK?  NO!  There cannot be a promise or guarantee to save your home from foreclosure.  When mortgage payments are missed, the lender/bank is in the driver's seat and can proceed directly to foreclosure.  However,k most of the time they do not want to and we are excellent at presenting alternatives to the lender/bank that they many times will accept rather than foreclose.  We are excellent at what we do, but NO PROMISES are made from us to you as to whether or not the lender will accept a "short pay discount" - they may or may not.

CAN I GET ANY MONEY FROM THE SALE?  No.  In granting a "short pay discount", you, the borrower, will not get any proceeds from the sale of the property.  If the lender is going to take a loss, they will not allow you to receive any proceeds.  It is illegal for us to pay you anything and it is called loan fraud. 

IF THIS DOESN'T WORK, THEN WHAT?  You will likely lose your house to the foreclosure auction. A short sale/short pay discount is something we try after you have exhausted your other options.

THE TERM "RELEASE"  A lender may offer to "release" its lien or interest against the property in exchange for less than the total amount of the loan.  A release will allow the property to be sold without paying off the total amount of the note.  However, the note is not termed "satisfied".  Advantage: This successful short pay will allow the property to be sold and therefore avoid a foreclosure.  Disadvantage: The remaining debt on the property (sometimes called a "short fall deficiency") still remains.  You are still liable for the note - in other words - you are still on the hook for the money.  The Reality:  It is not likely that the lender will pursue the short fall balance unless youare solvent with significant assets.  If you don't try a short sale and the property goes to foreclosure and is sold for less than what you owe,k you will have a short fall balance anyway.  So what does it hurt to try?