Bloomberg interviews Sean Shallis about Short Sales

With foreclosures still on the rise, the real estate market has found salvation in the short sale market. The short sale of a home is possible when the property sells for less than the amount owed on the loan. In order to make this possible, the mortgage lender must agree to discount the balance of the loan due to the financial hardship of the borrower.

Benefits of a Short Sale

As I explain in this video interview Short Sales benefit a neighborhood because they clear out stagnant properties that may have an adverse effect on value. We currently have several short sale properties available, some with stunning views of the Manhattan skyline, and we haven’t had trouble finding potential buyers. In every case we had multiple offers from people who had plenty of money to put down. Americans are out there still buying homes and trying to move it along. In our experience Short Sales can be complicated but definitely reward those investors who have patience and know a great deal when it’s presented to them. Going through the short sale process with a specialist short sale Realtor can definitely make all the difference between closing on a deal or having it fall through.

To view the full article, please visit bloomberg.com. To view video footage, please visit bloomberg.com video.

Now is the time to take advantage of the deep discount short sale market. Click the link to learn more about short sale properties in New Jersey.

Sean T Shallis and The Shallis Group are considered one of the Nations leading Short Sales experts. Call Sean immediately for a personal and confidential conversation about your personal situation. My direct line is 201-427-1032.

Short Sale vs Foreclosure: Which one is best?

With the unemployment rate at 9.5% as of October and headed to 10.5% by the end of the year, foreclosures and short sales are occurring in epidemic proportions. When someone is facing the devastating fact that they can no longer maintain their mortgage payment, it is important for financially devastated home owners to protect themselves as best they can. So where do you turn once you realize you cannot hold onto your home?

Once a home owner gets to this point there are two possible choices they can make. Walk away through foreclosure and live with the devastating effects on your credit for years to come or find an alternate solution. At first, home owners who are already mentally exhausted after months of falling behind on payments with no relief in sight might be tempted to just throw in the towel and walk away. However, foreclosure is the worst option you can choose. So what are the alternatives and why is foreclosure the worst option?

The Foreclosure Option
In the foreclosure process the lender assumes ownership of the house. Not only do you lose your house, you lose your equity (if there is any) and down payment as well. Also, a lender can get a judgement against you for any late fees and the cost of the foreclosure action. That’s just the beginning. Your credit will be in complete shambles for years to come making any sort of credit purchase almost impossible. This option should be the absolute last resort.

The Short Sale Option
The short sale of a home is possible when the property is worth less than the amount owed on the loan, commonly referred to as being “upside down” on a mortgage. However, in order to make a short sale possible, the mortgage lender must agree to discount the balance of the home loan due to the financial hardship of the borrower. The negotiation of the new loan balance usually takes place between the borrower and the loan modification or workout department of the bank or lender.

Although your credit will be affected negatively, this can be salvaged much sooner than redeeming your credit from a foreclosure. Another advantage to a short sale is once a buyer has been found, most home owners can avoid paying the mortgage payment while negotiations are taking place. Your home will also be put up for sale as is, which means you won’t be stuck with repairs in order for the house to close escrow.

Getting a Short Sale Done in Time
Getting a short sale done before a foreclosure takes place is of the utmost importance. To do that, you must have a Realtor in place that is experienced with the short sale process in order for it to not fall through. “Well…aren’t all Realtors knowledgeable in short sales”, you ask? Absolutely not. Short sales must go through a bank or lending institution as opposed to a seller and a specific ‘short sale’ process must be followed. Experience can make or break the short sale purchase.

Time is of the essence and your credit is at stake. This is not the time to place your future in the hands of a Realtor that is not completely experienced in the short sale process and might not get the job done in time.

Sean T Shallis and The Shallis Group are considered one of the Nations leading Short Sales experts. Call Sean immediately for a personal and confidential conversation about your personal situation. My direct line is 201-427-1032.

Short Sales in Jersey City: Is a short sale right for you?

New Incentives Help Homeowners with Short-Sales

Streamlining the Short Sale Process
The Making Home Affordable Program is offering up new help today for homeowners facing foreclosure according to the U.S. Treasury and the U.S. Department of Housing and Urban Development (HUD). This program was created by the Obama administration in hopes of offering financially destitute homeowners a loan modification option in order to save their home from foreclosure.

The Short Sale Option
When a loan modification is no longer an option, homeowners look to short sales as a way to salvage their credit for the future. The short sale of a home is possible when the property sells for less than the amount owed on the loan. However, in order to make a short sale possible, the mortgage lender must agree to discount the balance of the home loan due to the financial hardship of the borrower. You’ll need a professional real estate broker/agent who is specifically trained on how to perform short sales, because your broker/agent will be negotiating a “short payoff” on your mortgage with the lender. According to U.S. Treasury Secretary Timothy Geithner, the short sale option provides a “quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future.”

List of New Incentives and Process:

• Borrowers (Homeowners). Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program but don’t qualify for a modification or do not successfully complete the three month trial period. Before proceeding with a foreclosure, servicers must determine if a short sale is appropriate. Incentives.
• Incentives include: (1) $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; (2) $1,500 for borrowers/homeowners to help with relocation expenses; and (3) up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the government for every $2 paid by the investors to the second lien holders).
• Standardized Documents. The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and increase use of the short sale option.
• Property Valuation by Appraisal or BPO. Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements. The price may be determined based on an appraisal or one or more broker price opinions (BPOs), issued no more than 120 days before the date of the short sale agreement.
• Timeline. In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. Property must be listed with a licensed real estate professional with experience in the neighborhood. No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.
• Commissions. The Short Sale Agreement must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received.
• No Borrower Fees. Servicers may not charge fees to borrowers/homeowners for participating in the FAP.
• Program Expiration. The program is in effect through 2012.
• Deed-in-Lieu of Foreclosure Option. Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement (plus any extensions).
The complete document can be viewed at realtor.org.

Not exactly sure what to do in your personal situation?

(source: realtor.org press release)