What is a short sale? Here is what Wikipedia has to say about it:

A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens’ full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency.[1] Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.

A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower; however both will often result in a negative credit report against the property owner.

You are not alone. Nearly 30% of the homes currently for sale in San Clemente are distressed properties that are either in the foreclosure process, or a short sale or bank owned property. Last year, 44% off all sales were distressed.

There are other options to consider before deciding if a short sale is right for you. Making Home Affordable is the official program of the departments of Treasury and Housing & Urban Development. Due to the economic down turn, high unemployment and the declining real estate market, this program was put into place to offer assistance and options to homeowners that have found themselves in difficult circumstances.

Here are some options homeowners can look into:

  • Home Retention Options – this includes repayment plan, temporary payment reductions, or a loan modification
  • Foreclosure Prevention Options – this includes short sale, deed in lieu of foreclosure, Home Affordable Modification Program (HAMP), Home Affordable Foreclosure Alternatives (HAFA)

If you’re considering any of the above, you should start gathering the following items:

  • Copy of 2 most recent pay stubs
  • Copy of 2 most recent bank statements
  • Copy of 2 most recent IRS tax returns
  • Copy of your W2’s and/or 1099’s or profit and loss statement
  • Copy of your property tax bill
  • Copy of your monthly loan statement from each bank
  • Most recent home owners association statement
  • Any paperwork regarding possible foreclosure proceedings or legal action against your property

It can be overwhelming and stressful to go through this process on your own. Call for professional help instead – 714-396-2819. THERE IS NO COST to you.

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