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If I try a short sale and it doesn't sell before foreclosure can I give the deed to the bank and avoid the foreclosure?
You can't just give them the deed, no. All you can do is offer it to them and ask them to accept it instead of taking the property all the way through the foreclosure process.
The bank doesn't have to accept the deed in lieu of foreclosure, as it's commonly referred to. But they will want to have seen that you have tried to sell the house for a period of time before they will even consider accepting a deed in lieu.
If you have run out of all other options, the bank will be more willing to consider taking the property back. So the fact that you're attempting a short sale is good. Don't wait until the last minute before the sheriff sale to offer the deed in lieu, as well, because it will be more cost-effective at that point for the bank just to carry on with the foreclosure and sell the house.
But, if the short sale doesn't work, contact the bank and offer the deed in lieu of foreclosure. They'll have more paperwork and procedures for you to do, but it will help you get out of foreclosure a little sooner and won't be as bad on your credit.
Lets look at this a bit from the lender's side. It will help to understand some of their issues so you can negotiate a better short sale.
Do understand that negotiating a short sale can be difficult and pretty stressful as the lenders are overwhelmed with loans to sort out. How you submit the information, what you say and how you focus their attention on the defects and other things going on matters a great deal.
One reason a lender may decline to take the property back without a full foreclosure process can be the junior liens. Many times people in default on one loan are also in default on other loans, have back taxes (property or personal), liens from other creditors and similar. If the lender completes the foreclosure then the junior liens will no long remain on the property though the borrower will still owe the money in most cases.
Other things to consider. When a lender accepts the deed in lieu on a property they are missing out on the opportunity to see if the property would sell at auction. A deed in lieu is used to quickly move the process along so that the borrower hands over the property in reasonable condition plus waives their rights of redemption. Redemption can be pretty long in some US states. A short sale is better as the lender settles and there is no need to market the property as an REO like there would be with a deed in lieu.
What else can I help you with?
What is the difference between a foreclosure and short sale?
A foreclosure is the surrender of the property to the lien holder for nonpayment of the debt. A short sale is the sale of the property before the completion of the foreclosure in an attempt by the home buyer and the lender to avoid foreclosure proceedings.
How long is a property on short sale before it goes into foreclosure?
If you stop paying you mortage how long does it take before the bank will forclose
Is a short sale better than foreclosure?
In most cases it is preferable to foreclosure. I disagree. A short Sale has less impact on your credit score than a foreclosure.
Does a short sale happen when I stop making mortgage payments?
No. A foreclosure is what happens when you stop making mortgage payments. A short sale must be discussed and negotiated with the lender. In that case the lender agrees to accept the proceeds of a sale of the property even if they fall short of what is owed on the mortgage. They agree to forgive any remaining balance on the loan. It is a way to avoid a foreclosure. Not all lenders will agree to a short sale.
How do you avoid forclosure?
There are a few foreclosure prevention tactics that you can use. All will depend on what you what to accomplish.Here are a few options:File A Chapter 13 BankruptcyNot a long term solution but once you get a case number the lender has to cease all foreclosure proceedings and file for a motion to lift automatic stay in order to resume.Apply for a loan modIt wasn't until just recently the bank stopped proceeding with the foreclosure even though you may be working on getting your loan mod approved. However a loan mod can be a viable option if the bank is willing to play ball.Short salerequesting and filing a short sale generally will stop the foreclosure. A short sale can buy you lots of time since a typical short can last 3,6,sometimes 9 months. Beware though short sales have become a very complex process.Of course the bottom line is that you avoid foreclosure in many cases by buying a home you can afford and paying the mortgage on time.
What is the difference between a foreclosure and short sale?
A foreclosure is the surrender of the property to the lien holder for nonpayment of the debt. A short sale is the sale of the property before the completion of the foreclosure in an attempt by the home buyer and the lender to avoid foreclosure proceedings.
How long is a property on short sale before it goes into foreclosure?
If you stop paying you mortage how long does it take before the bank will forclose
Is a short sale better than foreclosure?
In most cases it is preferable to foreclosure. I disagree. A short Sale has less impact on your credit score than a foreclosure.
How do you stop or postpone foreclosure?
There are several ways to stop foreclosure. Following are the most common ways: 1- Apply for a home loan modification 2- Sell your home using the short sale process 3- File Bankruptcy 4- File an emergency bankruptcy 5- Hire a company to legally stop and postopne the foreclosure sale by challenging the trustee about the legitimacy of the foreclosure process. Ulitmately, always seek the advice of an attorney, credit, and tax professional before you decide what avenue to take to avoid foreclosure.
Does a short sale happen when I stop making mortgage payments?
No. A foreclosure is what happens when you stop making mortgage payments. A short sale must be discussed and negotiated with the lender. In that case the lender agrees to accept the proceeds of a sale of the property even if they fall short of what is owed on the mortgage. They agree to forgive any remaining balance on the loan. It is a way to avoid a foreclosure. Not all lenders will agree to a short sale.
What is ashort sale?
A short sale is a real estate transaction in which a property is sold for less than the amount owed on its mortgage. The lender agrees to accept the reduced amount to avoid the costs and time associated with foreclosure. This typically occurs when the homeowner is facing financial difficulties and cannot maintain their mortgage payments. Short sales can be a viable option for both sellers looking to avoid foreclosure and buyers seeking a potentially lower purchase price.
How do you avoid forclosure?
There are a few foreclosure prevention tactics that you can use. All will depend on what you what to accomplish.Here are a few options:File A Chapter 13 BankruptcyNot a long term solution but once you get a case number the lender has to cease all foreclosure proceedings and file for a motion to lift automatic stay in order to resume.Apply for a loan modIt wasn't until just recently the bank stopped proceeding with the foreclosure even though you may be working on getting your loan mod approved. However a loan mod can be a viable option if the bank is willing to play ball.Short salerequesting and filing a short sale generally will stop the foreclosure. A short sale can buy you lots of time since a typical short can last 3,6,sometimes 9 months. Beware though short sales have become a very complex process.Of course the bottom line is that you avoid foreclosure in many cases by buying a home you can afford and paying the mortgage on time.
Can a real estate broker refuse to pay an agent's commission?
A short sale is a process by which a homeowner who cannot keep up with mortgage payments may avoid a foreclosure. In a short sale, the homeowner allows his lender to market and sell the home.
What is the difference between a short sale and a foreclosure in real estate matters?
When the owner of a home can no longer afford to make payments on their home mortgage, the home may be sold in a short sale before it enters into foreclosure. A short sale is one of a homeowner's last resorts. It occurs when a home is sold for less than the balance remaining on the mortgage. Typically the homeowner and lender strike a deal in which the homeowner agrees to accept less than the amount they owe on their home (making no profit) in exchange for the lender forgiving the remaining amount on the loan. This process may still damage the homeowner's credit, but they will avoid foreclosure. If a homeowner can't make payments on their mortgage and the home does not sell through a short sale, the lender can take possession of and sell the property by a foreclosure proceeding. To find out more read the full article on Nestiny.com
If make partial payment on home in foreclosure after 6 months will this delay foreclosure?
You should contact a Realtor who specializes in Short Sales so they can negotiate your situation with your bank to stop the foreclosure.
What is better a short sale or a foreclosure?
A short sale is always better. I will tell you why very definitively. When you purchase a home on a short sale you are helping a homeowner salvage their credit and dignity and helping them out of a bad situation. You are also preventing a large loss for the bank and getting a great deal for yourself. Everyone wins if it is done correctly. A foreclosure will have a very bad effect on a homeowner's credit and the bank will in most cases take a bigger loss than they would in a short sale. A sellers credit in a short sale will be damaged to a lesser extent than a foreclosure. In most circumstances if you have done a short sale you will not be able to get another loan for two to three years. In a foreclosure it is usually around five years before you can purchase another home.
What happens to your credit on a short sale?
A short sale will have a detrimental affect on your credit record but not as bad as a foreclosure.
