What is a short sale?

A short sale occurs when a property is worth less than the amount of the mortgage debts.  But there’s a price to be paid.  As this story from NYT.com points out:

“Borrowers who owe more than their homes are worth can sometimes get out from under by negotiating a short sale with their lender. But short-sellers are branded as higher-risk borrowers, so new loans won’t come quickly or easily.”

“Fannie Mae requires a waiting period of at least four years for short-sellers who can only put down 10 percent on their next home. The waiting period is shortened to two years for borrowers who can come up with 20 percent.”

“Fannie does allow the four-year period to be cut in half for borrowers who can document that their loan default was a result of “extenuating circumstances.” The agency defines these circumstances as one-time events that were beyond a borrower’s control, such as job loss, medical bills, or a financial hit from divorce. Borrowers must also be able to show that they had no reasonable option other than to default.”

We are always on our toes when presented with a short sale.  Is the sale an arm’s length transaction?  Has all financial information about the sale been properly presented to the lender?  Have the final closing numbers been approved by the short lender?

We have the expertise to get you through a short sale.  Call us.

The full article can be read here.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

Sphere: Related Content