Short Sale Timelines:

If you only have a single Wachovia or World savings loan that needs to be approved for a short sale, then, the timeline is going to be far shorter than the usual 90 to 120 days from start to finish.   Expect about 30 days for approval and another 30 days or less to close the transaction.

If you have additional mortgage loans that need to be included in a short sale, the time can be considerably longer depending on the subordinate lenders.  We will give you an idea as to the time line when we talk to you.

When the lender evaluates your short sale package, they determine if you have an actual hardship.  The also look to see if you have any assets.  Next they look to see if you have the ability to give them a "Cash Contribution" for them allowing you to short sale your property since they are going to usually take a big hit on the equity loss on the property sale. 

The lender has the option to forgive the debt "all together" and just right the loss off - on their balance sheet. Or they can choose  to let you short sale your home and go after you for the sum of money for which they loss because you "shorted" them on what you owed them.  Even though you completed a short sale on the home, you may still have a monetary libility for up to 4 years for which the lender can still try to collect.  

Many people assume that because you sold the home in a short sale; you are released from any deficient amount from the difference in what you owed and what sum the home sold.  

1.  If the original home  was acquired thru purchase money and it is your primary residence.  You're Ok

2.  If you purchased the home and then refinanced the home to take out cash for home improvements and can show proof , your ok.

3.  If you purchased the home and then refinanced the home to talke out cash and use the cash to purchase another home, pay off bills, buy a car, use the money to take a trip, pay for a wedding, etc.  you are NOT OK.  You could have a monitory deficiency for which the lender can collect  for up to 4 years. Always, consut your tax preparer, CPA, realtor and attorney for recommendations and expertise to these questions.

4.  Many homeowners can have their representative negotiate the debt owed to a lesser amount or even completely away.  Many banks may choose to require a "cash contribution" to sign off on any debt owned.  Each bank/lender takes a different approach to this issue.  Contact you bank or have your representative  to discover where you stand.

Remember:

There are two issues when it comes to mortgage debt owed.

1. There may be tax consequences on a federal level and a state level depending if the home is a primary residence or not.  There may be "capital gain issues on "the gain" for which you received by "short saling" your home.  [consult your tax preparer, CPA or Attorney for alternative interpretations]

2. There may be a "capital gain" on the homeowner's side of the short sale. If so, the lender has the choice to go after that loss (loss on the banks side of the short sale) for up to 4 years from the time of the closing date of the short sale escrow. Make sure you or your negotiator try to negotiate with the lender to lessen the impact of this capital gain issue. [consult your tax preparer, CPA or Attorney for alternative interpretations]  

3. People think that just because a lien holder takes a lose on a 1st mortgage or one or more subordinate liens; that they will never be able to get relief from the the walking away of that debt by the homeowner, they  are not correct.  Example:  2nd mortgage holder is never paid for the mortgage lien and debt they are owed. The property is sold. The 2nd mortgage lender can still go after the consumer for the debt owed even though the home was sold.  Just because they agreed to have the home sold, they might not have agreed in writing to release the mortgage debt lilibility againt the former homeowner.  Many 2 or 3rd trust deed holders will sell the debt off to debt collectors prior to the time the home is sold by the 1st mortgage lien holder  via "short sale".  Becasue the debt was sold to a debt collector, it has to be negotiatated or just paid off in full. 

My point here is for you to do your home work and educate yourself.  You can contact us and we can help you thru the process of short saling your home and negotiating the debt owed. 

Example:  Bank of America has a clause in every short sale agreement for which they have the option to go after any unpaid debt after the short sale has been completed. What people do not understand [when they read that clause] is that B of A cannot go afer any monetary deficiency if the property is a primary residence and the home was purchased thru "purchase money", and they did not refinance the property to use the money for anything other than home improvement [and can prove it].  See the Mortgage Foregiveness Debt Relief Act of 2007, here  [consult your tax preparer, CPA or Attorney for alternative interpretations]

When you list a home iwth us and we include the short sale process,  we negotiate with your lenders to have them pay the commissions and include them in the cost of sale. This is usually an additional loss to the lender since they have to pay us instead of you.  

You may be required to pay a cash contrabution to the lender(s). That is as part of the negotiation process and agreement. We work to negotiate that away or lessen the amount.  We can discuss what typical amounts you can expect, when we talk to you. 

Sometimes, you might be required to pay for a basic termite report or other minor things.

If your wife or anyone else was on responsible for the original mortgage(s) and they were removed from the title of the property, you may need to put that person or persons back on the title to complete the transactions.  Lenders want to have the original people on the title before they will do anything.

The standard answer to this question is that you have to be at least 60 days late before a lender will accept a short sale.  Remember, you have to show that you are having a hardship under a traditional short sale.  Wachovia just does not ask for the actual hardship letter. They have a record of your payment history and can determine your hardship by simply looking at your payment history and credit.  That is why they do not ask for a hardship letter. 

If you have a subordinate lien (2nd or 3rd), the same holds true. You will have to be at least 60 days late and be able to show a hardship.  Remember, most subordinate liens are not liens held by Wachovia or World Savings. Therefore, the Wachovia short sale department will not want any thing, yet the actual subordinate lien holder will.

All lenders are different although some are better than others.  We keep a tabs on which lenders are working with the home owner in a favorable way.  When you talk to us we can give you a specific answer to your question as there are too many lenders.  Most home owners have had subordinate lenders that fit the typical group of lenders, so, we can provide you with that information, easily.

The trend with Wachovia is that they will not go after any diffency judgment on the sum of money you own as a total current mortgage virsus the amount of money the house sells for at the time of closing.  With many other lenders, they have up to 4 years to collect on any monies owed if they money is not purchase money. (means that you did not use the money to buy cars, gifts, trips, drugs, vacations, lcd tv, etc., if you refinanced and took cash out of the refinance).

Wachovia's mortgage short sale program leaves the home owner with no lingering mortgage debt. Across the nation, attorneys have reported that the fine print on short-sale contracts from major lenders hold borrowers responsible for the unpaid mortgage balance, and lenders have pursued collections in court after the sale.  Appearantly, not so with Wachovia. Great News!  Although things may change. You never know.

When you decide to list your home to get it sold under a short sale process, you can sell it under what is called an "AS IS" listing.  This means that the buyer of your home will understand and sign documents acknowledeging that the home is in dis-repair and need to be sold "as is"!   The lender will see the purchase contract  that you signed between the buyer and you and will make a decision as to what monitory contributions are needed to get the home sold. You (seller) may be required to make a monetary contrabution to the lender to get your home sold.  All things dealing with the sale of your home are negotiated between you and your buyer and the lender.   Your real estate professional can help you to define what approach to take when listing your home. 

Lenders will only allow you to do one or the other.  You can not do both at the same time.  Contact us and we will discuss what options you have so you can make the best decision for you and your family.

Lenders will not allow you to rent back a home that you currently own.  There has to be an "arm-length distance" between you and  the person who purchases your home in a short sale transaction.  If you try to sell your home and rent it back and it can be proven that you are tied to the new home owner, it is considered "Fraud" and you could be held liable for the full balance of the original loan you had with the bank before the short sale plus any other attorney fees, etc.   Simply, it is not worth it to do it!