Lee Morof's Real Estate Blog

Short sales, that is, sales that fail to cover the remaining mortgage due on homes, are still somewhat commonplace despite the recent uptick in the housing economy. The benefit to a Southeast Michigan short sale is that it can preserve the credit of the seller by avoiding foreclosure. Unfortunately, the short sale process is difficult to navigate.

The good news is that new FNMA and FMAC guidelines go into effect November, 2012, which may help your situation. Here’s a quick rundown on some of the changes:

Eligibility: The Federal Finance House Authority, in consultation with Fannie Mae and Freddie Mac, has loosened the eligibility. For instance, military families who receive Permanent Change of Station orders will now be eligible.

Streamlined Documentation:  Fannie Mae is reducing the documentation, and in some cases eliminating it, in cases of a borrower hardship of more than 90 days delinquent and with a credit score lower than 620.

Standard Payments: Subordinate-lien payments will be limited to $6,000, eliminating the negotiation for higher payments. Standardizing the transaction may speed up the short sale process on homes.

Servicer Approval: Servicers of Southeast Michigan short sales no longer need individual approval from Fannie Mae so long as the short sales conform to the requirements. Homeowners with hardships, such as divorce, illness or death of a borrower or employment transfer, may be approved as long as the loan is not yet in default. Servicers will also be required to complete short sale evaluations in 60 days.

Help Desk: A Short Sale Assistance Desk is already available to help real estate professionals in targets markets. This is an escalation procedure which may help facilitate and streamline the short sale process.

The streamlined process of Southeast Michigan short sales will assist homeowners most in need, and enable lenders to more quickly and easily qualify certain homeowners for a short sale who are current on their mortgage payments, but dealing with hardships.

If you’re considering selling your home as a short sale, I can help. Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney Lee Morof 
RE/MAX Showcase Homes, Birmingham, Michigan
www.NorthWoodwardHomes.com

A “short sale” is a sale of real estate in which the lender accepts less than is owed on the mortgage so that a new owner can buy it and the current owner can prevent going in to foreclosure. If you’re struggling to make your mortgage payments, if you owe more on your home than its current market value or if you’re nearing foreclosure, you may want to consider selling your home as a Oakland County MI short sale.

Not every homeowner qualifies for a short sale. Whether you qualify depends on how your financial situation has changed since you took out your mortgage. Your mortgage provider determines if you qualify for a Oakland County MI short sale, but here are some basic requirements to give you an idea if you might qualify:

1. Your home’s market value has decreased. Your home’s fair market value has reduced considerably and there is little chance of it coming back up any time soon. If you owe more than your home can sell for, this means you are “underwater” or “upside down.”
2. You have a financial hardship. Having a financial hardship will or has caused you to miss payments. Listed below are examples of hardships:

a. Mortgage adjustment
b. Job loss or curtailment of employment
c. Failed business
d. Excessive debt (a high debt ratio)
e. Divorce
f. Medical emergency/sudden illness
g. Bankruptcy
h. Death

3. You have no assets. The homeowner does not have any savings or any other assets, in order to bring the mortgage current. Other assets include other real estate, stocks, bonds and IRA accounts.

4. Your mortgage payments are in arrears. You are behind in your mortgage payment by more than one month, or you’ve demonstrated that you will not be able to keep up with your payments due to financial hardships.

If you’d like help selling your home as a Oakland County MI short sale, please give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney 
RE/MAX Showcase Homes, Birmingham, Michigan
www.NorthWoodwardHomes.com

The Southeast Michigan short sale process for selling your home can be very confusing. To begin to learn how to complete the short sale process, here’s a very brief overview of some of the steps:

• Discuss short sale options with your lender. Talk to your lender and gather all information needed to proceed with a short sale.
• Send a bank authorization letter. You must write a letter to the bank authorizing the release of your information to your listing agent.
• Write a letter of hardship. The hardship letter is an explanation to the bank of how your financial situation has changed since you took out the mortgage. You must detail, in writing, your financial difficulties, income, interest from investments and checking and savings balances.
• Prepare the settlement statement. The escrow company will prepare an estimated settlement statement, which will show your lender all of the transaction costs and detail exactly how much money the bank is going to get at the end. This includes the price the property will be sold at, an itemized list of expenses involved, balances on remaining loans and any other fees involved.
• Review by the mortgage lender. Once all the documents have been gathered and submitted as a Southeast Michigan short sale package, the mortgage lender will review everything.

If you’d like more complete information about the Southeast Michigan short sale process, please call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com. I can help you consider your short sale options for your home.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney 
RE/MAX Showcase Homes, Birmingham, Michigan
www.NorthWoodwardHomes.com

Oakland County MI short sales are used by homeowners to prevent losing their homes to foreclosure.  When you see an advertisement for a short sale, the home is in pre-foreclosure.

What is a short sale? It is an agreement between the sellers of a home in the beginning stages of foreclosure and their lender which allows the home to be sold for less than the existing loan balance. If an agreement is reached by all parties, a short sale could save the sellers’ credit by avoiding a foreclosure.

A short sale is not a short process, however.  It is a lengthy process with many legal and financial aspects.

The basic short sale process flows as follows:

• The seller contacts the lender to discuss the possibility of a short sale.
• The seller issues a letter authorizing release of the loan and property information to the buyer or escrow agency.
• A settlement statement is reviewed by the lender. The statement includes the proposed selling price, the amount left to be repaid and itemized expenses.
• The seller completes a hardship letter for Oakland County MI short sales, including a description of all the financial difficulties the seller is going through.  The lender validates and confirms all financial difficulties.
• The seller provides the financial documents including paycheck stubs, bank statements, a personal financial statement, monthly budget assessment and anything else required by the lender.
• Once approved, the buyer can proceed with the purchase.

What are the benefits of a short sale?  The seller is relieved of the debt they cannot afford, a foreclosure proceeding by the lender is avoided and the buyer purchases the home at a discounted price.

Whether you’re a seller who is interested in selling your home as a short sale or a buyer who wants to purchase a Oakland County MI short sale, I can help. Please call me today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
www.NorthWoodwardHomes.com

Although selling your home as a short sale probably isn’t what you’d prefer, it may be the best option for you.  The good news is that Oakland County MI short sales are becoming the preferred option for lenders hampered by the huge number of foreclosures.

To get you started on your short sale journey, here’s the condensed version of how to sell your home as an Oakland County MI short sale and not be a scammed “flop”:

1. Hire an experienced real estate professional.  Find a real estate attorney and/or agent who have successfully closed a lot of short sales.  REALTORS® with the Certified Distressed Property Expert (CDPE) designation will have a thorough understanding of how to assist their clients in foreclosure avoidance options. Having experienced professionals guide you through the process is crucial to your success.  You want them working for you as soon as possible because they’ll be communicating and negotiating with your lender.

2. Start now.  As soon as you know you can no longer afford your home, hire your real estate professionals and get started.  The longer you wait to get the short sale process started, the harder it’s going to be.  Like everything in life, the more options you have the better off you are.  Don’t wait until foreclosure is your only option.

3. Prove to your lender that you’re truly a financial hardship case.  If you just want to stop paying your mortgage, you won’t be able to sell your home as a short sale.  You must prove you honestly cannot afford your home by giving your lender a:

• Detailed financial worksheet documenting your expenses and income.
• Copy of your income tax returns for at least the last two years.
• Hardship letter providing details about why you cannot pay your mortgage.

4. Submit Letter of Authorization.  Write a letter to your lender giving him permission to talk with your real estate professionals about your loan.  Include the names of all the borrowers and their social security numbers, your real estate professionals’ names and contact information, your home’s address and loan reference number.

5. Take the advice of your real estate professionals.  You hired them for their expertise.  Now, take their advice and allow the pros to guide you the rest of the way through this process.

Whether you have questions about Oakland County MI short sales and the stumbling blocks to selling your home as a short sale, foreclosures or traditional home sales, I can help.  Please give me a call at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com