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What is a Short Sale?
A short sale is an agreement with the lender(s) to accept less than the amount owed by a borrower via a sale of the property to a non-related third party. When a borrower is faced with a hardship, has fallen behind (or is likely to fall behind) in the mortgage payments and the home cannot be sold for the amount owed to the lender(s), a short sale agreement may be an alternative for distressed homeowners. We negotiate with the lender(s) to accept a payoff of an amount allowable by the market conditions. The lender(s) then receive the complete proceeds of the sale and discharges the remaining debt. It's a very good alternative for some borrowers.
More on Loan Mods:
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First, we want to help you understand the purpose of a loan modification and answer the question of whether it is right for you. So let’s start with basics – A loan modification is a renegotiation of your existing loan terms with WAMU, others. That could be the length of time of the loan, the interest rate or even the principle amount. If you have both a first and second loan, modifications can be completed on both.
So do you qualify for a loan modification? Let’s go through scenarios facing thousands of consumers today. Are you in a position in which your mortgage is about to adjust and you won’t be able to make the payment? Yes… you can qualify. Is the total amount of the loan(s) more than your house is worth? Yes… you can qualify. Are you currently in foreclosure? Yes… you can qualify. Have your credit scores taken beating with your recently increased debt? Yes… you can still qualify.
Next let’s distill a few myths circling the industry right now. No… you do not need to be behind on your mortgage payments before WAMU, and others, will consider a loan modification. You can still qualify whether you are behind on mortgage payments or not. Even if your house is for sale you can be considered for a loan modification. And no, this program is not only for full documentation borrowers. Consumers that qualified loans using stated income can qualify for loan modifications.
If you are new to the loan modification industry or even if you have stepped into the process and are frustrated by not being able to get anywhere, we can help. Simply put, we understand the process within Washington Mutual for processing loan modifications. We have experts with significant relationships within the loss mitigation department. This allows us to communicate more effectively with WAMU and get your loan modification completed.
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TELL A FRIEND!
Not All Loan Modifications Are Created Equal
Author: KEVIN WALTON
There has been quite a bit of banter recently about loan modifications. Facts have been misquoted and misleading on how loan modifications are originated, approved, and who benefits most.
Loan modifications have morphed from a seldom used tool that was used as a streamline type of refinance to a possible real estate market savior. However, not all modifications are created equally.
If a borrower initiates contact with their lender about a loan modification, or vice versa, they are taking a calculated risk. The lender will create modification terms that are best for the bank, not the consumer. Untrained lender departments will handle the modification request which can be a test of ones patience. The consumer must be very careful about what they say to the lender representative. Saying the wrong thing can back you in a corner and actually hurt your chances of getting a modification. Conversations with your lender can be recorded and/or be logged into your customer service history as well. People have to realize that lenders aren’t required to do a loan modification, its voluntary. Using a third party negotiator who goes through the lender legal department, not customer service or loss mitigation departments, takes the burden off the homeowner. The packages that are prepared and submitted to the lender legal department are meticulous, detailed and to the point which cuts down processing time and streamlines the process.
The main advantage to using a third party attorney based service vs. doing it yourself is that the attorney knows the rules of the game and can create leverage. Before the modification negotiating starts, the attorney will ask for specific loan papers form your original and final loan package. The lender has 20 days to comply with the request. With all the buying and selling of loans from lender to lender, paperwork gets lost or the requested paperwork may not have been prepared or in compliance with the Department of Real Estate regulations. If the lender can’t supply the requested paperwork, they are on the hook for a lawsuit. Rather than go to court, the lender will entertain the attorney proposed modification. This leverage can translate to lower overall monthly modification payments for the homeowner, vs. doing it yourself with no legal leverage.
Homeowners must be aware of scams as well. The only individuals able to collect monies upfront for loan modifications are attorneys. Real estate industry people can not accept any monies payable to them upfront from the homeowner. It is a violation of RESPSA, a real estate regulatory act, to do so.
There are a few qualifiers to obtaining a loan modification, for example, you must be employed and have cash flow. Contrary to popular belief, you do not have to be delinquent on your mortgage to obtain a loan modification. You just have to show a hardship as to why you are struggling to make ends meet. Hardships come in many ways, shapes and forms. A bad real estate loan is a hardship as well.
Loan modifications keep families in homes and can stabilize our real estate markets, but if you want to deal with your lender on your own, exercise caution. Its best to let an experienced third party handle the negotiations. It will pay dividends in the long run.
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