The parallels between an efficient mortgage modification and an efficient short sale need to be pointed out. If the property owner has an extended, almost unlimited amount of time to liquidate their property, they would be tempted to attempt either one of these processes themselves. Maybe even get either one accomplished.
A short sale means convincing the bank to accept less than the current balance due on your mortgage as payment in full. Generally this means demonstrating genuine financial hardship. A short sale benefits mortgage investors financially more than foreclosure. It is well known that mortgage servicers benefit more from foreclosure than either mortgage modification or short sale. The secret is to get a short sale application to the hands of the mortgage investor.
An experienced short sale investor can mitigate all of the mortgage deficiency, based on the demonstrated mortgage owner hardship. That is a huge advantage to selling to an investor. Real Estate agents don’t have the experience in negotiating the mortgage deficiency.
The mortgage deficiency is the difference between selling price and existing mortgage balance. It defines a real estate sale as a short sale. By negotiating away the mortgage deficiency, the distressed homeowner can walk away from the property with no future obligations. Negotiating the deficiency BEFORE the closing is the only power and control the homeowner can have over the transaction.
The time element becomes critical here. As of this writing, the property owner must figure at least three months to get a short sale closed. That’s the national average. The property owner becomes the intermediary between two (or more) principals: the lender and the buyer. Add to the mix that the mortgage servicer may not have the authority to negotiate fully, and you have even more complications (read: stalling for time).
By getting the REST Report, the seller avoids all arguing about property value. Since the REST Report uses the bank’s software, there is no argument possible from the treacherous mortgage investor.
The list of supporting documents for a mortgage modification or short sale is identical. The hardship letter will reflect the differences.
Now for the other significant parallel with a mortgage modification. The property owner can hire a professional investor to negotiate the short sale for them. A competent investor can demonstrate a really efficient amount of time to negotiate your short sale and aquire your property. They’ve done it before.
The overall parallel is that if the property owner can afford 3 months or more to negotiate their own short sale, OR , maybe they can get it done for less cost than contracting a third party investor. An investor will be a cash buyer.
Any do it yourself short sale should start with the REST Report. It uses bank software to calculate Net Present Value, and therefore a purchase price for the distressed property. Because the calculations are bank figures, there is no argument or dispute as to a purchase price below mortgage loan amount in a foreclosure court.
Avoid HAFA, or the Home Affordable Foreclosure Assistance program associated with HAMP. It is a trap. Written by the banks, it benefits them and not the homeowner. An accomplished investor is your best bet to avoid the mortgage deficiency obligation. The mortgage deficiency is the amount that your mortgage servicer can come back for an uncollected debt in the future. No RE agent who has dealt with HAFA has anything good to say about the experience.
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The internet being what it is, certain search terms need to be empahasized so that you can find the best information. Obviously this page concerns short sale, short sale rules, and foreclosure alternatives. But other concerns such as try title, quiet title, and clear title may apply. The REST Report is best classified as loan modification software or mortgage modification software. It is used to establish chain of title and assignment of title. But if your reduced income is too low, short sale versus foreclosure or short sale foreclosure is the goal. The REST Report claim to fame is that you use it to calculate Net Present Value exactly the way the banks do, using their software. It is the answer for a real estate title search to decide if your mortgage servicer has the right to foreclose on you at all. This blog is dedicated to independant mortgage advice. You may have a cloud on your title which can block the sale of yourhouse. There is no excuse for foreclosure other than the treachery of your mortgage servicer.
This YouTube video explains the Broken Chain of Title, short sale, cloud on title situation
Click to read more about your Do-it-Yourself Mortgage Modification REST Report
tags: short sale vs foreclosure, short sale foreclosure,short sale, calculate net present value,
loan modification software,mortgage modification software,foreclosure alternatives,rest report,chain of title,real estate title search,independent mortgage advice,assignment of title,short sale rules,
Originally posted 2009-07-21 20:39:57. Republished by Blog Post Promoter
{ 4 comments… read them below or add one }
very nice blog, i gonna visit again
New blog post for Mortgage Mod Monster: Parallels between short sale and mortgage modification http://bit.ly/hVYXym
Parallels between short sale and mortgage modification – http://www.mortgage-mod-monster.com/?p=31
Parallels between short sale and mortgage modification – http://t.co/GsWtigMK