Ms. Jualeah Shaw
Realtor & Loan Officer 
Buy-Sell-Invest
(510) 695-7353

Are you or anyone you know facing foreclosure? 

Let’s assume for a moment that you are unable to make your mortgage payments.  You become a defaulted owner.  Now what?  Well, typically, your lending institution will foreclose its mortgage.  If this happens, not only will you lose your property when it goes back to the bank, you will lose all your equity.  In addition, foreclosure reduces your credit rating, leaving a permanent “stain” on your credit account.  Finally, you may even have to pay taxes on the debt reduction amount.  All in all, foreclosure is a bad deal for you.

 

There are two main types of foreclosure, foreclosure by judicial sale and foreclosure by power of sale.  In the former, the court supervises the sale of the property.  In the latter, the bank or mortgage holder sells the home.  In a strict foreclosure, not in use in all states, the bank would assume the deed of the defaulted mortgage, without the obligation to sell.  This method is less popular as few banks want to become landlords.  Usually, by whatever means, the foreclosure involves the sale of the property.

 

If you are unable to make your mortgage payments, or in another way are unable to fulfill the obligations of your lending contract, it is best if you sell your real estate as soon as possible.  This may mean selling at a much lower rate than market value, however as a homeowner, you may be able to retain some equity from your home, and you will definitely save your credit rating.  This is very important for your future real estate purchases, and just about anything else in your life.



Potential Seller Benefits

 Postpone or prevent foreclosure/Provides you more time to act
(Foreclosure proceedings take months to conclude/
short sales can take approximately 2-6 months to close/
The home is still yours until the foreclosure is final)


The process has been streamlined and is a lot less cumbersome than in past years

 Seller could possibly receive Relocation Assistance
(HAFA Program offers up to $10,000; banks offer up to $10,000)


Less impact on your credit score than a foreclosure
(You'll have the ability to obtain Conventional Financing sooner. 
With a short sale, you can obtain a conventional loan in 4 years. 
With a foreclosure you can obtain a conventional loan in 7 years )


Retain some dignity in knowing that you sold your home. 
You won't suffer the social stigma of the "F" word: foreclosure


No mortgage payments to make, unless you choose to make them (consult with your attorney)


When will a bank help?
When the owner proves hardship: loss of job, illness, divorce, financial distress, job transfer, death

 

How should you prepare for a Short Sale? 

Forms
Request for Mortgage Assistance (RMA)
4506-T
Listing Agreement
Purchase Agreement

Copies of financial documents
2 most recent pay stubs
2 recent bank statements
2 recent tax returns
Profit and Loss statements
Retirement statement
SSI Income
Financial Information Worksheet
Statement of Assets and Liabilities

Legal documents
Divorce decree
Death certificate
Child support payments

Property documents
Copy of property tax bill
Homeowner and/or Flood Insurance
HOA Information

Hardship documentation
Hardship letter
Unemployment benefits
Hardship affidavit

Contact me, Ms. Jualeah Shaw,
if you're facing hardships and need a short sale specialist.