the short sale process guide by marshall carrasco reno nv
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The Short Sale Process Guide
What is a short sale?
Benefits of a short sale
Why choose Marshall Realty?
Short Sale Vs. Foreclosure
Why walking away is not the answer
Loss mitigation tools for delinquent mortgages
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What separates
Marshall Realty
from the
rest
is our resources and
contacts. We have developed relationships with Consumer Credit
Affiliates, The Bank of America Reno help center, Wells Fargo Executive
Offices for Loss Mitigation, Senator Reid's Foreclosure Prevention
Taskforce, among others.
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We have direct contacts with Fannie Mae, Freddie Mac, and HUD.
Our goal has
been to become a total resource for homeowner's in
the
entire Washoe Valley. Our testimonial page
highlights our success.
Let us put our resources and expertise to work for you.
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What is a short sale?
A short sale is when a home is sold for less than the amount owed to
the lender or lenders. The majority of homes in Nevada currently listed or recently sold have
been in the form of a short sale.
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Selling your home for less than what is owed is not an easy decision.
However, if you are in a position where you are extremely upside downin your mortgage or facing a foreclosure, a short sale may be an option
to consider.
Benefits of a short sale
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Benefits of a short sale often include
Less damage to your credit than a foreclosure. A short sale is not
reported on your credit history. A foreclosure is reported and stays onyour credit for up to 10 years.
A homeowner who successfully negotiates a short sale may be
considered for a Fannie Mae backed mortgage after only 2 years.
A foreclosure makes the homeowner ineligible for a minimum of 5
years.
Lenders may consider the sale price as paid in full
forgiving the
deficiency.
You can move forward to a brighter financial future in considerablyshorter time.
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Why choose Marshall Realty?
By working with Marshall Realty you will benefit from the experience
of over 4 years in successful short sales. Longer than any other agentin the Washoe Valley.
We are familiar with the short sale requirements of each lender.
Your calls will be answered! You will be kept up to date every step ofthe way.
Your property is listed in MLS and available to all interested buyers.
You will not have a sign advertising it as a "Short Sale" or
"Pre-foreclosure".
You never pay a fee. Lenders pay the commission from the proceeds
of the sale.
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Short Sale Vs. Foreclosure
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Foreclosure
Issue 1
Successful Short Sale
Future Fannie Mae Loan-
Primary Residence 1
A homeowner who loses a hometo foreclosure is ineligible for a
Fannie Mae-backed mortgage
for a period of 5years.
A homeowner who successfullynegotiates and closes a short sale will
be eligible for a Fannie Mae-
backed
mortgage after only 2 years.
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Foreclosure
Issue 2
Successful Short Sale
Future Fannie Mae Loan-
Non-Primary2
An investor who allows aproperty to go to foreclosure is
ineligible for a Fannie
Mae-backed investmentmortgage for a period of 7 years.
There is no similar declaration orquestion regarding a short sale.
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Foreclosure
Issue 3
Successful Short Sale
Credit Score
Score may be loweredanywhere from 250 to more
than 300 points.
Typically will affect a creditscore for over 3 years.
Only late payments on a mortgagewill show, and after sale, mortgage
is normally reported as 'paid as
agreed', 'paid as negotiated', or'settled'.
This can lower the score as little as
50 points if all of the other
payments are being made.
A shore sale's effect can be as brief
as 12 to 18 months.
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Foreclosure
Issue 4
Successful Short Sale
Credit History
Foreclosure will remain as apublic record permanently, and
on a person's credit history for
10 years or more.
A short sale is not reported on acredit history.
There is no specific reporting item
for 'short sale'. The loan is typically reported 'paid
in full, settled'.
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Foreclosure
Issue 5
Successful Short Sale
Security Clearance
Foreclosure is the mostchallenging issue against a
security clearance outside a
serious misdemeanor orfelony conviction.
If a client has a foreclosure
and is a police officer, in the
military, in the CIA, security,
or any other position that
requires a security clearance,
in almost all cases clearancewill be revoked and position
will be terminated.
On its own, a short sale does notchallenge most security clearances.
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Foreclosure
Issue 6
Successful Short Sale
Current Employment
Employers have the right andare actively checking the
credit of all employees who
are in sensitive positions. In many cases, a foreclosure is
reason for immediate
reassignment or termination.
A short sale is not reported on acredit report and therefore not a
challenge to employment.
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Foreclosure
Issue 7
Successful Short Sale
Future Employment
Many employers are requiringcredit checks on all job
applicants.
A foreclosure is one of themost detrimental credit items
an applicant can have and in
most cases will challenge
employment.
A short sale is not reported on acredit report and is therefore not a
challenge to future employment.
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Foreclosure
Issue 8
Successful Short Sale
Deficiency Judgment (Not Applicable in California)
In 100% of foreclosures (exceptin those states where there is
no deficiency), the bank has the
right to pursue a deficiencyjudgment.
In some successful short sales, it ispossible to convince the lender to
give up the right to pursue a
deficiency judgment against thehomeowner.
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Foreclosure
Issue 9
Successful Short Sale
Deficiency Judgment (amount)
In a properly managed short sale, thehome is sold at a price that should be
close to market value, and in almost
all cases will be better than an REOsale resulting in a lower deficiency.
In a foreclosure, the home willhave to go through an REO
process it does not sell at
auction. In most cases this will result in
a lower sales price and longer
time to sale in a declining
market.
This will result in a higher
possible deficiency judgment.
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Why walking away is not the answer
Recently, there have been reports claiming that a "strategic default"
can be an appropriate and even beneficial reaction to an upside-downmortgage or impending foreclosure.
While this idea has spread rapidly, the truth is that a default
is never
an easy road to choose, and rarely is it ever strategic.
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Why walking away is not the answer (cont.)
In fact, defaulting on your mortgage can be incredibly dangerous and
irresponsible when handling the financial future of you and yourfamily.
Unfortunately, the ramifications of a "strategic default" are rarely-if
ever-explained, leaving many homeowners stranded on an island ofmisinformation.
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Why walking away is not the answer (cont.)
If this is your situation, first understand that you are not alone. Millions
of homeowners nationwide are in similar circumstances. The onlydifference between them and you is that you're looking for answers
...contacting Marshall Realty is a great place to start!
The best part is, we never charge our clients a fee, ever!
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Allows you to make a regular full payment plus a portion of the delinquencyeach month over a period of months to cure the delinquency.
Conventional Mortgage -
Repayment Plan
VA Mortgage -
Repayment Plan
Allows you to make a regular full payment plus a portion of the delinquency
each month over a period of months to cure the delinquency.
Allows you to make a regular full payment plus a portion of the delinquency
each month over a period of months to cure the delinquency.
FHA Mortgage -
Repayment Plan
Loss mitigation tools for delinquent mortgages
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The delinquency is added to your loan balance in order to bring your loan
current. The interest rate and terms may be modified.
Conventional Mortgage -
Loan Modification
VA Mortgage - Loan Modification
The delinquency amount is added to your principal balance, which
may result
in fully reinstating your loan. A change in interest rate and/or
the loan term
may also be considered. Late, foreclosure, attorney fees may be waived.
A lender may consider adding the delinquent amount to your principal
balance, which may reinstate your loan. A change in interest rate and/or the
loan term may also be considered.
FHA Mortgage -
Loan Modification
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Allows the repayment of part of the delinquency each month along
with your
regular mortgage payment. If you are temporarily unable to meet
your
mortgage payment, suspended or partial payments may be accepted until you
have the ability to resume the payment schedule.
Conventional Mortgage -
Forbearance
VA Mortgage - Forbearance/Repayment Schedule
Suspended or partial payments for a short period of time followed by
repayment plan, modification, reinstatement, or full pay off.
You must prove
your hardship is temporary and will resume ability to pay mortgage.
Suspended or partial payments for a short period of time followed by
repayment plan, modification, reinstatement, or full pay off.
You must prove
your hardship is temporary and will resume ability to pay mortgage.
FHA Mortgage -
Forbearance
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Con entional Mort a e Short Sale/Pre fore los re sale
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If you have the ability to make mortgage payments or will have the ability in
the future, but your lender has decided it cannot extend further forbearanceor a repayment plan, VA may buy a loan from the lender and take over theservice.
Conventional Mortgage -
Short Sale/Pre foreclosure sale
VA Mortgage -
Refunding
Your lender may work with you to obtain a one-time payment from the
FHA-Insurance Fund to reinstate your loan. You must be at least 4 monthsdelinquent and able to make full mortgage payments. You will execute a
promissory note & subordinate mortgage payable to HUD. This note
carries no
interest & is payable at time of home sale or refinance.
Allows the borrower to sell the house and use the proceeds to satisfy the
mortgage debt even if the proceeds are less than the amount owed.
FHA Mortgage -
Partial Claim
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Conventional Mortgage Deed in lieu of foreclosure
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If there are no liens on the property and VA agrees, you will sign legal documents
to make VA the owner of your property. VA will have to pay your lender a claim
for the difference between the value of your home and the mortgage balance.
If a
deed is accepted, you may be released from further liability or asked to repay thegovernment for all or part of the claim VA paid.
Conventional Mortgage -
Deed-in-lieu of foreclosure
VA Mortgage
Deed-in-lieu of foreclosure
Allows the borrower to sell the house and use the proceeds to satisfy themortgage debt even if the proceeds are less than the amount owed.
If you are not eligible or failed at other Loss Mitigation Tools, including a Short
Sale, you could voluntarily deed or surrender your property to HUD in
exchange for a release from all obligations under the mortgage.
FHA Mortgage -
Short Sale/Pre foreclosure sale
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Conventional Mortgage
If you are not eligible or failed at other Loss Mitigation Tools, including a Short
Sale, you could voluntarily deed or surrender your property to HUD in
exchange for a release from all obligations under the mortgage. There must be
no liens on the property.
Lender participation is voluntary. These programs are subject to
lender/service
approval. Lenders are not mandated to provide these options. Each lender has
qualifying criteria a borrower must meet before they will consider offering
these Loss Mitigation Tools. Please contact your lender for a workout packet
to apply for delinquency.
FHA Mortgage -
Short Sale/Pre foreclosure sale
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Trying to figure out the best solution to your problem can be very
frustrating and overwhelming.
We offer resources completely FREE!
Don't wait until it's too late and more importantly DO NOT PAY
anyone to help you and your family.
Let us help you find the best resource for you.
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C MARSHALL CARRASCO
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