Regardless of whether you are in foreclosure, if selling your home will not net enough to pay off your existing mortgages, you may want to consider selling on a short sale. For many years, there were few reasons to sell on a short sale, apart from earning the real estate agent a commission, but times have changed.

Why Agents Recommend Short Sales

You’ll hear the myth over and over: “Short sales protect credit.” That’s only partially true. Your credit will tank if you fall behind on your payments. Experts say agents who repeat that mantra without clarification do so out of ignorance or self interest, take your pick.

There is one exception. If you have no 60-day-plus late pays on your credit report, Fannie Mae may still offer you a loan to buy another home. However, most people who sell on a short sale are in default past 60 days, so this exception does not apply to them.

A short sale could ruin your credit rating. It might not happen right away, but sooner or later, unless the bank has specifically agreed not to report the shortage, the bank may report it as a Score Factor Code 22. That score factor relates to delinquencies, derogatory records and collections.

Real estate agents should not give legal advice to clients facing foreclosure nor assure sellers that their credit rating will not suffer adverse affects. Those who insist on this practice may find themselves facing a process server down the road and be praying that their errors and omissions insurance will cover them.

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You’re almost there. You and the seller have agreed on terms. The title company has gotten the paperwork and the check from your lender. All you have to do is sign a bunch of papers, hand over the down payment and pay the fees.

Set up closing: The formal closing, or the meeting where the final papers are signed and the house officially becomes yours, is coordinated by the title company and generally takes place at the company’s office. A title company (or title insurance company) checks the property’s title history and looks for liens or any other obstacles to sale. Once the title is deemed legally “free and clear,” the company offers insurance as reassurance of a clear transfer of the home. Your mortgage loan officer will probably suggest a title company to use; if not, your accountant or real estate attorney can help. Because your escrow account will probably include your annual homeowners insurance premium, your insurance provider and the closing agent (the agent at the title company you’re using for closing) will need to be in contact before the closing date.

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Fixing credit report errors can be done. You just need to know how to do it. You have the right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information in your credit file.

Let’s get started so your credit file is in perfect order for your to buy that first home.

Dispute Inaccuracies

When a credit reporting agency receives a dispute, it must reinvestigate and record the current status of the disputed items within a “reasonable period of time,” unless it believes the dispute is “frivolous or irrelevant.”

If the credit reporting agency cannot verify a disputed item, it must delete it. If your report contains erroneous information, the credit reporting agency must correct it. If an item is incomplete, the credit reporting agency must complete it.

For example, if your file shows that you were late in making payments on accounts, but fails to show that you are no longer delinquent, the credit reporting agency must show that your payments are now current. Fixing credit report errors requires action on your part.
If your file shows an account that belongs to another person, the credit reporting agency would have to delete it. Also, at your request, the credit reporting agency must send a notice of correction to any report recipient who has checked your file in the past six months.

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Question: What Does An Approved Short Sale Mean?

A reader asks: “When I look at homes on Realtor.com, I see homes being advertised as an ‘approved short sale.’ Can you tell me why some of them say that and others don’t? Plus, when I call the agents to get more information, they tell me to offer more than the asking price, and I don’t know why. If it’s an approved short sale, why would the seller want more money?”

Answer: Short sales are a complicated process, so I can totally understand your confusion. The wait for short sale approval can be very long, and sometimes buyers lose patience.

Another little quirk about short sales is the fact they are often priced under the comparable sales. Some agents list them low purposely to attract multiple offers. Therefore, the offer a bank accepts might be much higher than the list price because sellers often pick the highest priced offer.

Here is a quick overview of the short sale process:

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Feeling like there is no other option but foreclosure can be an overwhelming experience. Know that you are not alone. Thousands of homeowners in the United States are facing the same challenges as you every single day. Now more that ever before there are solutions.

You need help, guidance and someone who understand the difficult choices you are facing about your home, your family and your life. Quite often a homeowner facing foreclosure thinks they have to go through the process alone, forced into a dauting situation caused by unforeseen circumstances beyond their control. Facing damage to your credit, and the possibility of not being able to purchase another home for 10 years can be a tough future to face, but by tapping into the expertise of a knowledgeable Real Estate Agent, there are options available for you and you’ve come to the right place.

We provide you with information about how to avoid a foreclosure, explain the effects it can have on you and your family, and offer other options that may be available to you. This includes a Short Sale, and we can help you determine if you qualify.

If you want to stay out of foreclosure through short sales, We can help. Call us at 909.260.4060 or email us at Homes@CGTheGroup.com for more information.

Please know that all communication will be strictly confidential.

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PROSECUTORS: Officials file 169 actions over alleged sham consultations. One of the firms has a Corona office.

Prosecutors nationwide filed 189 legal actions Wednesday against loan modification consultants, including one with a Corona office, accused of bilking homeowners who are desperate to make their mortgage payments more affordable.

The lawsuits and cease-and-desist orders announced by Federal Trade Commission Chairman Jon Leibowitz and California Attorney General Jerry Brown were part of a nationwide sweep of alleged sham consultants by the federal agency and officials in 19 states.

Leibowitz used the announcement to put scam artists on notice and urged homeowners to protect themselves from being exploited.

He said fraudulent loan modification consultants are “full of hollow promises designed to fatten the pockets of criminals and con men.”
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