Late on Mortgage?

Firstly, Important Tips: 1) Don't ignore it 2) Contact the lender and see resources below 3) respond to mail from the lender 4) There are housing counselors with the jurisdiction you live in 5) There are various scams out there that promise to stop foreclosure immediately if you sign a document where you sign over the title, commit fraud, or cheated out of your property - never sign a legal document unless you read it and understand it

Do you know of someone who is falling behind on mortgage payments?

1) On average foreclosures may lower your credit score anywhere from 250 to over 300 points and typically affects the score for over 3 years.

2) Short sales at times can have little to no affect on your credit score.

3) Foreclosures remain on your credit history for 10 years or more.

4) Short sales are not reported on your credit history.

Call today for a private consultation and more information

on how we can help someone you may know.

As a Certified Distressed Property Expert and REALTOR, I can give the expertise necessary to save their credit, relieve the uncertainty and most of all, help their family. As a CDPE, I can save 8 out of 10 people from going into foreclosure. Time is of the essence!

~Zen Carague

571 213 7331; Zen@HomesByZen.com

PS 7 out of 10 who foreclose never talk to anyone.

Reasons To Avoid Foreclosure:

Issue	Foreclosure	Successful Short Sale
Future Fannie Mae Loan – Primary Residence (Effective May 21, 2008)	A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.	A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.
Future Fannie Mae Loan – Non Primary Residence (Effective May 21, 2008)	An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years.	An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.
Future Loan with any Mortgage Company	On any future 1003 Application (Standard Loan Application), a prospective borrower will have to answer YES to question C, in Section VIII, that asks, “Have you had property foreclosed upon, or given title or deed in lieu thereof?” This will affect all future rates.	There is no similar declaration, or question regarding a short sale.
Credit Score	Score may be lowered anywhere from250 to over 300 points. Typically, this will affect score for over 3 years.	Only late payments on mortgage will show, and after sale, mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points, if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months.
Credit History	Foreclosure will remain as a public record on a person’s credit history for10 years or more.	A short sale is not reported on a credit history. There is no specific reporting item for “short sale.” The loan is typically reported as “Paid in full, settled.”
Security Clearances	Foreclosure is the most challenging issue against a security clearance, outside of a conviction for a serious misdemeanor or felony. If a client has a foreclosure, and is a police officer, in the military, a government employee, a security officer, or any position that requires a security clearance, in almost all cases, clearance will be revoked and position will be terminated.	A short sale, on its own, does not challenge most security clearances.
Current Employment	Employers have the right, and areactively and regularly checking the credit of all employees who are in sensitive positions. A foreclosure, in many cases, is grounds for immediate reassignment or termination.	A short sale is not reported on a credit report, and is, therefore, not a challenge to employment.
Future Employment	Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have, and, in most cases, will challenge employment.	A short sale is not reported on a credit report, and is, therefore, not a challenge to employment.
Deficiency Judgment	In 100% of foreclosures (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment.	In some successful short sales, it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner.
Deficiency Judgment Amount	In a foreclosure, the home will have to go through an REO process if it does not sell at auction. In most cases, this will result in a lower sales price, and a longer time to sell in, a declining market. This will result in a higher possible deficiency judgment.	In a properly managed short sale, the home is sold at a price that should be close to market value, and, in almost all cases, will be better than an REO sale, resulting in a lower deficiency amount.

What Is A Short Sale?

A Short Sale is when:

the bank allows the property to sell for less than what is owed on the mortgage - sales price is used as a payoff. Deficiency judgments are avoided as well.

The seller will not and can not get any money at closing, but the possibility of a forgiven debt of the mortgage should be a bright light at the tunnel.

Why Would Lenders Agree To Lose Money?

Lenders would lose significantly more money if the property goes into foreclosure - lenders are in the business of lending money, not owning homes.

I've Already Received My Foreclosure Notice. Is It Too Late For A Short Sale?

The short answer is no. There are a few variables, though, that can affect the foreclosure timeline.
A qualified Realtor, or better yet, a Certified Distressed Property Expert, can help you extend the foreclosure timeline up to 6 months, and in many circumstances up to 7 or 8 months.
A home sale can be done and approved, up to the day of the bank sale, or auction of the home.

I Haven't Missed Any Mortgage Payments. Can I Still Do A Short Sale?

Oftentimes, the lender will not consider a short sale if there have not been any missed payments. That issue can be overcome if we can show a compelling reason (hardship) why the payments have been made, and why the payments are going to stop in the near future.
We would need to show how the payments were made, and where the money came from. If the payments were made with your credit cards, by borrowing from family members, or even if the money came from retirement accounts, as an example, it would help build the case. This will not guarantee that the lender will accept the short sale, however, there are instances where they have done so.

How Do I Pay The Realtor Commissions, Taxes And Other Expenses Associated With A Home Sale?

The homeowner doesn't pay any of the expenses associated with the sale of the home, such as commissions and other closing costs. Those expenses are paid by the lender. They are, however, included as part of the total shortfall that the owner would be responsible for, if the bank is successful with a deficiency judgment or promissory note.
In December 2007, President Bush signed into law, the Mortgage Forgiveness Debt Relief Act, which eliminates the capital gain income tax that used to be levied on the forgiven portion of the primary residence's sale. The tax is still in effect for second homes, and investment properties. For details please consult with a CPA.