Loan Modifications, Short Sales and Foreclosures

Loan Modifications, Short Sales and Foreclosures

Thinking about doing a Loan Modification?  Be very careful!  I have been contacted by dozens of frantic home owners that are being foreclosed on due to failed loan modifications.  Sure there’s a nice little chart that shows that you fit right into the requirements to be able to qualify for the loan modification. You may only be a few days late on your payment after making years of on time payments and a representative from the big bank calls and says something like. We see you’re having trouble with your mortgage and we would like to offer you the chance to modify your loan. You are currently making a house payment of $1,500 per month, let’s bring that down to $900 per month for a trial period. Wow, that sounds great, yes of course you will do it. Even if the modification doesn’t go through, having the reduced payment will allow you to pay off some other bills or maybe fix the leaky roof. You go for many months making this easy lower payment. Meanwhile the bank ask you for tons of documents. You send them in, they say they never got them, you send them again, they say they got them now. Another month goes by, someone else calls and says they need those documents, you say they have them, they say they don’t, you send them again. This goes on for months and months. Then one day a notice comes saying you were denied because you make too much money, you don’t make enough money, you didn’t give them all the docs they need, or whatever excuse they come up with, but the bottom line is you don’t qualify. Oh well, you say O.K. you will just start making the regular payment again. Oh no, they want all back payments, Attorney fees, Bank fees, Late fees, usually more then $10,000 to get caught back up and they want it right away. If you don’t have it they are foreclosing quickly. If you don’t have it, what are you going to do? The first thing is call an Attorney and then call a Realtor. Have the Realtor do a CMA (Market Analysis) for you. If your first lien is less then the value of your house, you may be best off filing Chapter 13. Some times they can get rid of your second lien. If your first lien is not less then the value of your home, then a Short Sale may be your next best option. If they foreclose on you, you may find yourself paying taxes on the difference and the bank may try to come after you for the difference. If you Short Sale you may not have to pay the taxes and the bank may release you from the difference. No matter what you do, things aren’t great. The best thing to do, is to always talk to an Attorney from the very beginning. There is some confusion with some people I am meeting where they file for Bankruptcy and then let the home foreclose or want to sell short after the Bankruptcy. That seems backwards to me. If you’re going to lose the house no matter what, I think the Short Sale is your best option. Feel free to email me with any questions you may have. I am a Realtor, not an Attorney, I can’t advice you on what to do, I can only tell you what I have seen happen to many, many friends and neighbors. Don’t expect the Short Sale process to be easy either. The bank will play the same game with asking for the same documents over and over again. Two of the largest U.S. banks will drag the sale of your home out for many months.  You may want to stay in your home until we are close to closing on it. Many people are able to stay in their homes during the process and only have to pay their utilities since the bank usually refuses to take their payments during the process. Our Team pays a Short Sale company help in the processing of Short Sales, this help with keeping everything documented and speeds up the entire process. So far, every Short Sale we have done with them has been completed. Once your sale is complete, we can refer you to a lender who can get you on a path to clean up your credit report and get you prepared to purchase a home in the future. Some people are able to purchase another home immediately. If they have to sell short due to a job transfer over a certain amount of miles away from the home they Sold, they may be able to purchase again immediately. Our Team has become Short Sale Experts by necessity not by choice. Mark is Certified as a Short Sale and Foreclosure Expert through the National Association of Realtors. Feel free to contact us if you live in Denver or it’s suburbs and need assistance selling your home short.

NRT Colorado, LLC d/b/a Coldwell Banker Residential Brokerage and The Kinslow Team are not associated withthe government and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

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