Lee Morof's Real Estate Blog

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

If you are financially distressed, it might be time to cut your losses and minimize the damage to your financial future. If you’re feeling the economic pressure of an impending foreclosure, then consider putting your home up for a Southeast Michigan short sale.

While it might seem like Southeast Michigan short sales should be a speedy process, they’ve been known to play havoc with many unsuspecting sellers. In honor of April Fool’s Day, we’ve created a list of the many short sale pitfalls sellers encounter.

• Settle your accounts – Strive to pay off all your other debt. Your bank might not approve your short sale application if you have judgments from other creditors pending.

• Pay your HOAs – Even if you’re defaulting on your mortgage, it’s important to meet your monthly Home Owner’s Association dues. Your HOA usually has to approve a short sale, so you definitely want to be in good standing when it’s time for them to sign on the dotted line.

• Make sure your buyer is pre-approved – Talk with your real estate agent and have them ensure that your buyer is legitimate. If there is any wavering on the buyer’s side, the bank might not want to deal with the hassle and you’ll be declined.

• Get your documents together – Your bank will want copies of all documents concerning your property before they even consider approving a Southeast Michigan short sale. Remember, they are forgiving you of debt, so do your best to make them want to help you.

• Don’t give up – Even if you’re declined for a short sale several times, there’s a chance they’ll approve you the next go around. Find out why you were declined and try to remedy the situation as soon as possible.

Don’t let a short sale fall through and turn you into a fool this April. Follow the tips above and you’ll be prepared to present a credible account to your bank. If you’re considering a Southeast Michigan short sale, please call 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
Call:  248-514-2640
www.NorthWoodwardHomes.com

With the current economy, homeowners are finding themselves in sticky situations when it comes to keeping up with their mortgages. If the possibility of foreclosure is within your future, you might want to determine whether you’re a candidate for a Southeast Michigan short sale.

A short sale is when the owner and the bank agree to sell the home for a loss. Short sales are more beneficial to the homeowner’s financial future because it tends to damage their credit score by reducing it around 100 points instead of the 300 points a foreclosure might inflict. If you are starting negotiations with your bank to try and list your home as a Southeast Michigan short sale, consider the following three qualifications.

1. Foreclosure has NOT already taken place. A short sale can still happen during the foreclosure process if you’re still in pre-foreclosure and you have only received notices from your bank. However, if your home is already in foreclosure and is up for auction, it is too late.
2. You have NOT filed for bankruptcy. If you have, then you are ineligible for a short sale. Banks cannot pursue collection of debt if you’ve filed for bankruptcy — so you can’t work with them on selling your home.
3. You owe more than your home is worth. The best way to determine whether your home would qualify for a Southeast Michigan short sale is to ask an experienced real estate agent to estimate your home’s current value and compare it to how much you still owe. If you owe more than it’s worth, then you may qualify for a short sale.

Don’t wait until it’s too late! If you’re having trouble paying the mortgage on your home and meet the three qualifications above, it might be time to talk to your bank.

This subject can be extremely confusing. As a Certified Distressed Property Expert and Attorney, I am uniquely qualified to help!  Please call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com, if you are searching for more short sale information.

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

When a buyer makes a Southeast Michigan short sale offer on your home, it’s impossible to know for sure if the offer will be accepted by the lender.  Even when you’ve negotiated the offer with the buyer and come to an agreement that meets both of your needs, there’s still no guarantee that the lender will say yes to the short sale.

Here are three tips to help get Southeast Michigan short sale offers on your home accepted by the lender:

1. Convince the lender that you have a legitimate hardship. Submit a hardship letter,  paystubs, bank statements, monthly budget and profit and loss statement to demonstrate that you cannot make your monthly payments and have no disposable income. Here are examples of hardships to mention in your letter:
   a. lost your job
   b. reduced hours/pay at current job
   c. have to move more than 75 miles from home to get a new job
   d. death of a borrower
   e. divorce
   f. onset of a disabling illness
2. Negotiate with the buyer to exclude terms and contingencies that complicate the sale. Lenders do not like to accept short sales when they include time contingencies or when the short sale is contingent on the sale of a home.
3. Submit paperwork as a complete package. Ask your lender for a list of all documents needed. Fill out the paperwork and collect all other documents required. Make copies of everything. Put together a complete package including all the documents your lender requested, and only then send the entire package to your lender. If the lender later tells you they can’t find a particular document, don’t waste your time arguing about it, just resend the information – it’s easy to do because you already have copies prepared!

If you’d like more information on the possibility of selling your home as a Southeast Michigan short sale, give me a call 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
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Today’s economy has been rough on most everyone’s pocketbooks, and when it comes to prioritizing payments, mortgage payments can take a hit. If you find yourself in a bind, owe more than your home is worth and can’t afford your current mortgage, then you might want to consider talking to a real estate agent, one who is a Certified Distressed Property Expert, and bank about the possibility of a Southeast Michigan short sale.

To help you prepare for those conversations, here are the basics about Southeast Michigan short sales:

• What is a short sale? A short sale is an agreement that your real estate agent negotiates between you and your bank to sell your home for less than you still owe. The bank absorbs the loss so that the seller doesn’t have to repay the balance of the mortgage.
• Why would you do this? Your home is now worth less than you owe, which is called being underwater, and you have a financial hardship. There are a number of reasons that could put you in financial hardship and have you considering a short sale — such as unemployment, job transfer, illness, under employment and divorce.
• How does it work? A real estate agent lists your home at its current market value. Then a buyer places an offer that is usually much less than the amount required to pay off the loan. The seller or agent (if the seller has given written permission for the agent to do so) takes the short sale purchase agreement to the bank holding the mortgage in hopes that they’ll accept it.
• What do you need? Basic guidelines usually include a hardship letter about why you need a short sale, bank statements for the last three months, two years of tax returns and permission for your real estate agent to negotiate short sale terms with your bank.
• How should you proceed? Most accountants agree that a short sale is better for your credit score than a foreclosure. Talk to your real estate agent who is a Certified Distressed Property Experty and have him or her refer you to an accountant who can evaluate your situation and help you take the steps necessary to secure a good financial future.

There’s a lot more to short sales than I’ve outlined here, but it gives you a starting point.

If you’re finding it difficult to meet your monthly mortgage payments and still owe more than your home is worth, then you might want to consider a Southeast Michigan short sale. It can decrease your debt and release you from that monthly financial burden. Call me 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
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Just over a year ago, the federal government launched the Home Affordable Foreclosure Alternatives (HAFA) program.  It was supposed to streamline the Southeast Michigan short sale process for home owners and home owners nationwide.  This article provides an update on HAFA.

How does HAFA benefit Southeast Michigan home owners?

Home owners who don’t qualify for a loan modification can apply for a Southeast Michigan short sale through HAFA.  If the home owner qualifies for a HAFA short sale, the difference between the sales price of the house and the loan balance is forgiven.  In addition, HAFA offers qualified home owners $3,000 for moving expenses.

How well is HAFA working?

From April, 2010, to December, 2010, HAFA has disbursed just $9.5 million of the $4.1 billion in its budget.  And, through May, 2011, only 8,541 HAFA short sales have been completed.

However, HAFA short sales have increased.  There were only 320 HAFA short sales pending in September, 2010. Now, there are 18,000 pending nationwide.

What went wrong with HAFA?

Because the loan balance is forgiven with HAFA short sales, lenders cannot collect that amount.  Lenders can collect the loan balance on short sales that go through them, so the majority of short sales are still handled by individual lenders’ programs.  Although HAFA provides a $1,500 incentive to the lender, it isn’t enough to entice them to go along with the program.

What’s next for HAFA?

The HAFA program expires at the end of 2012, and by then, the U.S. Treasury hopes to have a model process and uniform documents that banks could use to speed the process and avoid greater losses that come with foreclosure.  In the meantime, changes are being made to HAFA to ease eligibility requirements.

If you have any questions about selling your home, whether through a regular sale or a Southeast Michigan short sale, 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

You want to avoid a foreclosure on your home so you’re decided to try to sell it as a Southeast Michigan short sale.  Unfortunately, there are several stumbling blocks that can keep you from successfully selling your home as a short sale.

Lee Morof is a Certified Distressed Property Expert and Attorney.

Here are 4 short sale killers you should be aware of before deciding to sell your home as a Southeast Michigan short sale:

1. You have not defaulted on your mortgage.  Lenders will almost never accept requests for short sales until you are significantly behind in payments and have received a notice of default.

2. You filed for bankruptcy.  If you’ve filed for bankruptcy, a Southeast Michigan short sale will most likely not happen. Few, if any, lenders will consider a short sale when the seller has filed for bankruptcy.  This is because collection activities are not allowed in bankruptcies and a short sale is considered a collection action.

3. More than one lender is involved.  If you have a second or third mortgage (or home equity loan or line of credit), all the lenders must agree to the terms of the short sale. Unfortunately, this is often difficult because the second or third lenders are the ones who absorb most of the loss.  If you have more than one lender, and you want to try for a short sale, do a title search to verify the first and primary lender.  Making a deal with the second or third lender is a waste of time because you’ll still owe the first lender.

4. The lender drags his feet.  Many short sales fail because the lender fails to complete the deal before the property goes to auction.  Get the lender to move faster by making sure he has everything he needs in one concise package.  If the lender doesn’t get everything at one time, he tends to set the file aside and forget about it.  You can also speed up the process by working with a Southeast Michigan real estate agent who is experienced with and knowledgeable about short sales.

If you have additional questions on short sales, foreclosures or any other southeast Michigan real estate related topics, please give me a call at 248-514-2640 or email me at info@NorthWoodwardHomes.com. I’m happy to help.

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