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Because Lincoln Crossing was built during the peak in Real estate values, most homeowners owe more on their home than it is worth.  Most people are either trying to do a loan mod or a short sale.  Banks have come along way on the short sales. We have help our clients with both the short sale and the loan mod process. For home sellers who owe the lender more than their home is worth, it's not as bleak as it might sound. Negotiating a short sale with the lender could be the solution.

This means the seller or the seller's agent sells the home to a buyer at market, or slightly below market value, and the lender agrees to accept the proceeds as payment in full on the mortgage even though the sales price is less than the existing encumbrances.

The downside is lenders are not required to negotiate discounted payoffs, and there is no guarantee your lender will let you do a short sale
A short sale in real estate is not always a pleasant transaction.

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."

More than half of all sales in Lincoln over the past few years are short sales. That's how prominent short sales have become.

When lenders agree to do a short sale, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for a short sale.

Make sure you call Shawn today four all you lincoln crossing real estate needs

Short Sales

Here are some basic terms to educate you about short sales and foreclosures.

Foreclosure Terms :

DELINQUENCY: The day after a payment is due, a loan is DELINQUENT. For example, if the grace period runs until the 16th of each month (as it does for most conventional and FHA loans) payments made from the 17th to the end of the month results in the loan actually becoming DELINQUENT for a short period each month.

DEFAULT: A loan is IN DEFAULT as soon as any payment has been due and unpaid for more than 30 days. Lenders normally have collections departments established to handle owner's of loans in different stages of default.

FORECLOSURE: The legal process by which a lien holder repossesses a property.

FORECLOSING ATTORNEY: Attorney representing the foreclosing lender. A knowledgeable attorney can be a great asset in getting short sales through the system.

NOTICE OF ELECTION AND DEMAND (NOD or NED):This is the result of legal action taken on behalf of the lien holder. This notice serves to inform the borrower and the public that their property has entered the foreclosure process and will be sold at an auction at some specified date (about 110 to 120 days henceforth). Foreclosure lists are normally generated from "NOD" lists.

PUBLIC TRUSTEE: My state has a third party representative in between the lender and the borrower (and the public) in a deed of trust state. They conduct the public aspects of the foreclosure process. After the NOD (also commonly called NED) is filed, the homeowner generally has to work through the appropriate county public trustee to work on their loans. Each county has a Public Trustee's office whose charter is to notify the public and, receive cure payments, and to conduct auctions. Most states do not have public trustees.

CURE: An amount of money determined by the bank and the bank's attorneys needed to pay all arrearages on the delinquent loan. Successful curing will result in a withdrawn NOD, and a re-instated mortgage.

AUCTION: A foreclosure sale. An auction is the public sale of a mortgaged property, following foreclosure of the loan secured by the property. In today's market, it's typically the 1st lien holder who promulgates the typical auction and ends up with the property.

nd now some key Bank Personnel/Terms :

SERVICING COMPANY: Most entities that we think of as "banks" or "lenders" are actually service providers, that are servicing a loan for some third party. The actual lien holder could be a group of investors (Wall Street) or even a country. Short sales are typically transacted through the service provider.

DATA COLLECTOR: Level one person at a servicing company (bank). After a short sale package and offer has been sent in, their responsibility is to ensure that all of the short sale documents are appropriate. They forward the package to the assigned mitigator for determination. These people can be the most challenging people to interface with through the entire transaction.

LOSS MITIGATOR: Level two person at a servicing company (bank). After a short sale package and offer has been sent in, they "mitigate" the bank's loss by following a set of mathematical computations (internal to the bank). Most of the time, a loss mitigator has approval authority of a short sale offer. Sometimes the losses are sufficiently large that the short sale approval process may involve the management chain as well as the investor.

And finally some Bank Workout Options:

These service providers have more options than just short sales. Below are a list of the more common options and their relative meanings:

Reinstatement--Catch-up on late payments and bring the loan current--can also be called a "Cure."

Forbearance--Take the total of the arrearages and divide this number by six or twelve months. Homeowner has to be able to pay this amount monthly PLUS their regular monthly payments. Low probability of success, and bank's do not favor these.

Loan Modification--Basically a "re-casting" of the loan. The bank reps will take the total of the arrearages and pile it on to the principle (the bank can even alter interest rates). Homeowner must qualify for this option. Sometimes the bank will discount the interest rate and even the principle balance. Currently there is over a 50% default rate on modifications that are zero to eight months old.

Short Sale--The bank takes less than what is owed. The lien holder may seek monies owed.

Deed in Lieu--Sign over deed and give keys to bank and walk away. Junior liens normally kill this option. This option is sometimes called "Cash for Keys."

Foreclosure--A repossession of the property by the lien holder (1st normally). These properties are known as REOs (Real Estate Owned).

I hope this helps define some of the normal terms used in foreclosure (short sale) transactions. I have tried to use their common meanings, without getting into too much jargon.

I think short sales are good for both buyers, sellers and banks.  Buyers normally get a house for slightly less than market value.  Sellers get out from under their debt obligations without too much credit damage and banks get more $$ from the sale than they normally would get if the house went to foreclosure.