Knoxville Short Sale Help

Knoxville TN Short Sale vs. Foreclosure

David — Mon, 24 Jan 2011 23:14:05 +0000

Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The stop foreclosure solutions available to Knoxville, TN area residents are many.

Following is a brief list of foreclosure drawbacks compared to the benefits of a successful short sale:

ISSUE	FORECLOSURE	SUCCESSFUL SHORT SALE
Future Fannie Mae Loan (Primary Residence)¹	A homeowner who loses a home to Foreclosure is ineligible for a Fannie Mae backed mortgage for a period up to 7 years with some exceptions based on extenuating circumstances. See: fanniemae.com	A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed mortgage after 2 years with a 80% maximum LTV ratio.
Future Fannie Mae Loan (Non Primary)²	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 2 years with a 80% maximum LTV ratio.
Future Loan with any Mortgage Company	On any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed-in-lieu thereof in the last 7 years?” This will affect future rates.	There is no similar declaration or question regarding a short sale. FHA – If current at the close of short sale, a homeowner may apply for an FHA loan immediately. If homeowner is late before close of short sale closing, will be eligible for FHA loan after 3 years.³
Credit Score	Score may be lowered anywhere from 250 to over 300 points. Typically will affect score for over 3 years.	Only late payments on mortgage will 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 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 for 7 years or more.	A Short Sale is not reported on a persons credit history. There is no specific reporting item for “short sale.” In most cases a loan is typically reported “paid in full, settled” or “paid as negotiated.”
Security Clearances	Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. 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 clearance will be revoked and position will be terminated.	On its own, a short sale does not challenge most security clearances.⁴
Current Employment	Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination.	A short sale is not reported on a credit report and is therefore not a challenge to employment.⁵
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.⁶
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 pursuit 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 longer time to sale 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.

1 Fannie Mae Announcement 08-16: Michael A. Quinn, Senior Vice President, Single-Family Risk Officer

2 Fannie Mae Announcement 08-16: Michael A. Quinn, Senior Vice President, Single-Family Risk Officer

3 Mortgagee Letter 09-52, 4155.1 Chapter 4.C.2. Short Sales

4 5 6 Short sales are currently not explicitly reported on a credit report

Knoxville Short Sales On The Rise In 2011

David — Tue, 18 Jan 2011 04:29:52 +0000

Feeling Financially Squeezed? Stop Foreclosure Now, Lenders are Primed for Short Sales in 2011

Short sales are a terrific option for Knoxville homeowners struggling with unaffordable mortgage payments. In fact, lenders’ losses due to foreclosure are projected to increase at record rates in 2011, giving them more reason to pursue short sales. Lenders are projected to incur losses as severe as 85 percent in foreclosure! Meaning, after deducting the expense of the foreclosure process on a $100,000 loan, they may only get back $15,000!

It’s common sense that lenders will be looking toward the short sale solution. Even though they are accepting less than is owed on the property, they lose far less than in a foreclosure sale.

It may be a surprise to many that lenders actually want to work out a solution that benefits all parties. Oftentimes, the lender is seen as the villain in the situation. I’ve found that the lenders want to avoid foreclosure just as much as homeowners. The free download report on this website talks more about working with your lender, and details all the stop foreclosure alternatives available to you.

Download the short sale report and call me today; I can help you develop a plan to work with your lender and avoid foreclosure.

David Hamilton, CDPE
Ferguson Realtors
865-310-0636 Cell
865-690-1300 Office

Stop Foreclosure Help for Knoxville Homeowners – Discover the Dignified Solutions to Foreclosure

David — Fri, 11 Jun 2010 00:15:24 +0000

A Dignified Solution for Homeowners to Stop Foreclosure

Do you or someone you know owe more on your home than what it is worth and don’t know what to do? With one in seven mortgages currently behind on payments, it’s very possible someone close to you needs help.

Many of these homeowners made smart, responsible decisions, but were simply caught off guard by the challenging market. The important thing to understand is that foreclosure should be a last resort, know that there are better solutions and very strong reasons to pursue them.

For example, through the new Home Affordable Foreclosure Alternatives Program, or HAFA, you may be eligible for a $3,000 incentive to avoid foreclosure by pursuing a short sale or deed-in-lieu; two dignified foreclosure alternatives.

I’ve written a report that details how you can benefit from these foreclosure alternatives. You can download the report at the Knoxville Foreclosure Solutions website:

www.KnoxvilleForeclosureSolutions.com

Read this report to learn about your short sale eligibility and then give me a call or send me an email. As a CDPE designated agent, I can help you find your best options.

David Hamilton
Ferguson Realtors
865-224-6631 Cell
865-690-1300 Office

Short Sale Myths

David — Mon, 24 May 2010 11:00:39 +0000

Short Sale Myths

You must be default on your mortgage to negotiate a short sale. Short sales are not a function of default status on a mortgage. They are the result of the bank mitigating a potential default situation that, in the long run, will cost more money to the investors. Many short sales in instances when the borrower was not in a default situation have been completed.

Listing my home as a Knoxville short sale is embarrassing. Anytime we get ourselves into a tough financial situation it can cause some embarrassing feelings. It is important to remember that those feelings will not help us get back onto stable financial ground. We need to overcome our feelings and do what is right to protect our financial futures.

Buyers aren’t interested in short sale properties. Short sale properties are often times available at a competitive price to other properties on the market. In many cases, Knoxville short sale properties are very well cared for and have not endured the deferred maintenance of an REO property. Short Sale properties are in great demand in the marketplace.

There’s not enough time to negotiate a short sale before foreclosure. A good negotiator takes into account the timeline affiliated with a foreclosure. There is always a chance that a short sale can be negotiated. However, the only way to know for sure is to try.

The bank would rather foreclose than complete a short sale. Banks do not want to foreclose on property. It is expensive and carries a high level of liability once the bank owns that property as an REO. Wherever possible, banks are seeking other loss mitigation options before foreclosure.

Short sales are impossible and never get approved. Short sales are complicated, but not impossible. Short sale approvals are negotiated every day in Knoxville.

Questions about alternatives to a foreclosure situation in Knoxville? Email David Hamilton or call today for a confidential no obligation consultation.

David Hamilton
Ferguson Realtors
865-224-6631 Cell
865-690-1300 Office
800-747-0713 Toll-Free

Foreclosure – What it Really Means for Knoxville Homeowners & How to Avoid It

David — Sat, 22 May 2010 01:24:42 +0000

9 Ways Homeowners are Avoiding Foreclosure

Reinstatement: Bring the loan current
- If reason for distress was temporary and resolved
- Can be done up to day of bank sale
- You must be able to pay all the payments and late fees due and your mortgage will remain the same

Forbearance: Temporary re-payment plan
- If reason for distress was temporary and resolved
- Requires lender approval
- You may be allowed to make your back payments over time
- Normally does not fully reinstate mortgage until plan is completed

Refinance: New loan with reduction in monthly payments
- If you have sufficient equity and strong enough credit score
- Typically a short term solution since your payments almost always go up

Loan Modification: Modify original loan terms
- Requires lender cooperation
- Modifies loan and often reduces payment
- You will have to qualify with financial information most of the time like a full doc loan
- You must have verifiable means of income.
- You should be certain you can afford the modified mortgage payment.
- You can pursue a mortgage modification and prepare for a short sale simultaneously.
- See: MakingHomeAffordable.gov

Sell the Property: Use equity to payoff or pay difference
- If you have equity, can sell and cure foreclosure
- Many sellers believe they have less time than they actually do

Rent the Property: Must make loan current
- Can your property rent for the mortgage amount or more?
- In many cases rent does not cover full expense of property ownership
- Also need to factor in insurance and taxes

Short Sale: Negotiate with bank to accept sale under loan amount
- A short sale can be negotiated if the homeowner has:
- Financial Hardship
- Monthly Shortfall on Financial Worksheet (or pending shortfall)
- Does not have significant assets to assist in paying down the mortgage
- A homeowner is ‘short’ when:
- When a borrower owes an amount on his property that when combined with closing costs and commission is higher than current market value.
- A short sale occurs when:
- A negotiation is entered into with the homeowner’s mortgage company or companies to accept less than the full balance of the loan at closing. A buyer closes on the property and the property is ‘sold short’.

Deed in Lieu of Foreclosure: “Friendly” Foreclosure
- Sign deed over to bank rather than go through foreclosure process
- May still be reported as a foreclosure
- Typically only works with one mortgage

Bankruptcy: Will stall a foreclosure and if payments are lowered to where property can be afforded may save property
- Very difficult to sell property once in the process, requires trustee cooperation
- Will only stall a foreclosure – will not eliminate mortgage

If you are experiencing a pending, temporary or permanent hardship in paying your mortgage, there are a number of alternatives to foreclosure that may help you save your home and your credit. Email David Hamilton or call today for a confidential no obligation consultation.

David Hamilton
Ferguson Realtors
865-224-6631 Cell
865-690-1300 Office
800-747-0713 Toll-Free