Fred Sed's Blog: March 2009

How does a homeowner benefit from a short sale?

First and foremost, it relieves the stress of being in foreclosure and being hounded by the mortgage lender; and it allows homeowners to get rid of their big mortgage payment and move on with their lives. A short sale allows you to stop the foreclosure and get a fresh start. In our experience, this is the primary benefit to homeowners. They are tremendously thankful to just relieve the burden that their home and mortgage have become.

A short sale also prevents additional damage to your credit. Having some late payments and a foreclosure filed has already done damage to your credit. However, a completed foreclosure will do much more damage and lower your credit score tremendously. Obviously, if you have to declare bankruptcy, that is a huge black mark on your credit. A short sale results in the mortgage actually being paid off, which reflects positively compared to a foreclosure.

Why would a bank or mortgage lender want to do a short sale?

A common saying is that banks are in the business of lending money and do not want to own real estate. This is slightly misleading but is essentially true. When a bank takes a property back via foreclosure, it is a long and expensive process and often results in holding the property in their inventory as a non-performing asset. Banks have a limit to the amount of non-performing assets they want to hold. Once this limit is exceeded, they have strong incentive to get rid of the properties at discount prices.

For a lender, doing a short sale avoids many of the costs associated with the foreclosure process. Attorney fees, delays from borrower bankruptcy, damage to the property, costs associated with resale, property tax, insurance, etc. all must be paid by the bank during a foreclosure. In a short sale scenario, the lender is able to cut its losses by getting rid of the property faster.

Please call our offices today to see if you do qualify for a short sale, it is FREE for you and has a HUGE positive impact on your future!

Fred's Short Sale Video's

Fred Sed

(949) 274-3733

1. What is a Short Sale?

A short sale is the process by which a homeowner can sell a house for less money than he actually owes on the mortgage(s). This is done by the seller and the listing agent providing proper documentation to the mortgage lender(s) to convince them to reduce the mortgage balance to allow the sale. The mortgage lender (or bank) actually takes a loss (or write-off) on the mortgage because the value of the home has fallen below the mortgage balance AND the homeowner is in a poor financial condition that will not allow him to continue to pay on time.

If the bank approves the discount on the mortgage, the home can be sold for a lower price without the seller having to come up with cash to cover the shortfall, and the mortgage is satisfied and the foreclosure process stops.

2. What type of situation is the short sale best for?

Most short sales are done on properties in foreclosure. This means the homeowner is at least 3 payments behind and the foreclosure suit has been filed by one of the mortgage lenders. Recently, more mortgages that are simply behind or "in default" are considered short sale candidates without actually being in foreclosure.

Also, the homeowner typically has negative equity or no equity in the home. In other words, the total balance owed on the mortgages is equal or greater than the price at which the house can be sold. This situation is growing increasingly common due to the easy availability of 100% mortgages (no money down) as well as the recent decline in prices. This is particularly prevalent in the Southern California area, which has a large glut of homes for sale and where prices have declined 10%-30% in the past year.

In addition, the homeowner must have some type of financial hardship that is preventing him from paying the mortgage. This is commonly job loss, medical bills, disability, or some other hardship.    

A typical situation for a short sale is this:

-Homeowner purchases a home for $600,000 in 2004 with 5% down payment, the mortgage balance is $570,000.

- By 2005, the home's value has increased and interest rates have declined so the homeowner refinances to pull cash out. Home value $660,000, new mortgage $660,000.

- In 2006, homeowner gets laid off and continues to make payments from savings, hoping to land a new job soon.

- By 2007, savings are gone and still no job. Homeowner begins to miss payments and decides to sell the home for $660,000.

-As the months pass, the home has not sold because values have dropped back to $600,000 and the foreclosure process has begun. The Real Estate Agent presses to lower the selling price to entice a buyer, however that would require the homeowner to come up with cash at closing to cover the mortgage shortfall.

-Homeowner is stuck in the house and the foreclosure is proceeding.

If your situation sounds at all like this one, you might benefit from a short sale, Call Fred Sed at 949-274-3733.

Fred's Short Sale Video's

Orange County Short Sale Realtor Specialist - Homeowner Hardship

*Have you lost your job?

*Have you taken a reduction in income?

*Do you have any medical complications?

*Are you going through a divorce or death in the family?

*Did your interest rate on your mortgage adjust upwards?

*Are you in financial distress at the moment or feel that you will be in the near future?

*Are you in foreclosure or heading toward it?

If you feel that any of the above do relate to you and you are a current homeowner, then contact us today!

We have been and currently are successful in assiting homeowners avoid foreclosure and avoid

damaging there credit for a long period of time.

Contact Fred Sed Today, Your Orange County Short Sale Realtor. Fred can help you with Foreclosure

Prevention.

Fred's Short Sale Video's

Fred Sed

(949) 274-3733

FredSed@PGcoastal.com

www.FredSed.com

Orange County Short Sale Realtor : Foreclosure Prevention Consultant

Are you heading down the path toward foreclosure?

Are you wondering what options you have left?

Do you feel that the only option you have is to hand your keys over to the bank?

Are you financially unable to make your mortgage payments any more?

Whatever the reason DO NOT ALLOW YOURSELF TO FORECLOSE, so many homeowners are not aware of

the real options that they have when they can no longer afford there mortgage and are heading toward

being foreclosed on.

WE CAN HELP YOU! We specialize in assisting homeowners avoid foreclosure by way of a Short Sale. A short sale is when a homeowner can not sell the home for the amount that is owed to the bank, because the value has decreased below that amount. So the only way the property can be sold, is if the bank approves a Short Sale and allows the property to be sold for less than what is owed to the bank. Once successful then homeowner is able to sell the home and avoid foreclosure.

Please contact Fred Sed 949-274-3733, your Orange County Short Sale Realtor Specialist, to see if you qualify.

It is your duty to make sure if you qualify for a Short Sale. This service is FREE for you as a homeowner and there is NO COST for you to go through this process.

YOU HAVE NOTHING TO LOSE AND SO SO MUCH TO GAIN, SO TAKE ADVANTAGE OF THIS FREE SERVICE!

Fred's Short Sale Video's

Fred Sed

(949) 274-3733

FredSed@PGcoastal.com

www.FredSed.com

Orange - County - Short - Sale - Specialist - Qualifying - Terms

*Owe more than your home is worth.

*Having trouble making your mortgage payments.

*Having already missed 1 or more mortgage payments.

*Have some sort of hardship that holds you back from your payments and or monthly expenses.

*Have a loan in which the interest has adjusted up which makes the payments hard to make.

*Need to sell your home, but there is not equity to do so.

*Heading toward a foreclosure and have run out of options.

There are many other factors that would help you qualify for a short sale. Please contact our Short Sale Realtor Fred Sed 949-274-3733 to discuss if you do qualify for a short sale. We do cover all of Orange County, Riverside County, and Los Angeles County.

Watch Fred's Short Sale Video's

To Avoid Foreclosure and Save Your Credit, Call Your Orange County Short Sale Specialist Realtor, Fred Sed, and see if this would be the best option for you!

Fred Sed

(949) 274-3733

FredSed@PGcoastal.com

www.FredSed.com