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short sales
Short Sale -vs. – Foreclosure 
( What’s better for you?)

Millions of Americans are facing this question:

"Should I just let my home go into Foreclosure, or a Short Sale with the bank?"

What is the sensible thing to do?

My advice is for you to remove the emotional aspect of this decision first,
What to do now can have repercussions for many years down the line. Some people are even talking that 2005 was and will be the highest value in Real Estate in our lifetimes?

That’s not good if you are underwater on your mortgage.. .

“Stick it to the bank!”
Do you really want to do that?
In a way, I understand that the banks have gone out of their way to dig this hole we are presently in. . destroying trillions on equity money that was supposed to pay for your retirement or your child’s college tuition. 

Now. . you are facing hard decisions.

I know you are not happy. . I’m not either.I lost hundreds of thousands of dollars in equity value on my own home. . .I will probably never see that again.

I got caught just like anyone else. . it was easy and the banks made it easier by putting all this money on our laps to buy anything. 

Now it’s too late. . .
The question now becomes what will have a bigger long term effect on my credit and lifestyle?
As far as I can see. . you have these following options
Swallow hard. .it's not going to be easy. . .

.#1  You may  continue making payments, disregard the value of your home and do the right thing. . .pay what you said you will  pay. Yes, the banks screwed you by sucking you in a black hole of negative amortization, adjustable rates and teaser rates.. .you will more likely suffer a negative cash flow for years to come. Remember, the Obama administration has said. 

”In a healthy economy, real estate should grow up to 3 to 5% per year”

 The underlying message here is :

“We screwed up in 2004-2005 and we will not let it happen again!.. if real estate shoots up to the roof again. . They will simply raise interest rates to control it., They’ve learned their lesson”

What about you. . . have you?

This solution is very hard to swallow. .in a way you will be stuck with your property for years to come making the bank very happy . . . paying the interest rates  by holding an imaginary gun to your head. .in the form of:

YOUR CREDIT RATING !

In our country. .ourr credit reputation is GOLD.
That’s what our parents taught us.
But there is a limit to this debilitating belief?

Are you willing to work for years and pay your hard earned money for an investment that went BAD? . .

But you have decided to do the honorable thing now?

How long can you afford to go with a negative equity on your home?
A few years?

Do you?. . It’s your call.

Just in case you have doubts, you may want to explore OPTION #2

#2   You can negotiate with the lender to modify your loans, drastically reducing your payments, so you at least break even. In some cases you may even  get a principal reduction. At the least, you will get a fixed rate and your ARM will disappear.
 
There is really no reason for you to hire someone to do a Loan Modification for you.
All you have to do is call your bank and cry HELP!
If you are sure, you want to keep the property and don’t mind a negative equity on your investment for the next few years. . a loan mod is the least you should do for yourself.

Remember, these loan modifications are now government funded. Yes, that is the bail-out money you been hearing about.

Caveat: Simple question. .
Are you sure a Loan Mod is the best for you with no principal reduction?. ..
Remember, there is a loan modification and a loan MORTIFICATION. .be careful when you sign and fully understand the consequences.
One question you may ask yourself. .. . When will I catch up?, (and more importantly) will the cost of my mortgage payments  ever be recouped?

If you don’t have a potential for profit at the end.. then you are not buying a home, you are just renting from your banks. .at a higher rental payment may I add, plus you get to fix all the problems in the house. . 

Broken A/C unit ? don't call your bank . ..YOU FIX IT YOURSELF!

Not good position. .when you are underwater. .if you ask me.
let’s try #3

#3   You simply do a short sale. 

Short Sales have a far less damaging affect on your  credit report. Did you know that because of the process of a short sale, you may expect your credit score to lose around 80 to100 points .

What does that mean? Essentially you can buy another home in a couple years  after repairing your credit.. .and  can go back and purchase literally the house next door.

Yes, next to the home you sold previously as a short sale.

You can buy it now at a MAJOR DISCOUNT compared to what you paid for your previous home. . .the one next door.

This will be the ultimate slap on the face for your neighbors. .you come back 24 months later to the same neighborhood and your mortgage payment is only HALF of what they are paying. .and they all still be under water!
But, this is not about your neighbors. . .is about you, your family. . 

A hidden  benefit to you as a seller.. .you are not required to pay your mortgage payments while you are doing a short sale.

You are doing a short sale because you have a hardship and hardships exist when you don’t have money. I can not legally advice you NOT TO PAY your mortgage when doing a short sale but typically all my clients that we have helped before. . .they simply couldn’t afford it. A short sale takes a few months from beginning to the end. Meanwhile you are living on your property with no mortgage payments. . 

This is the only way you will get any money benefit from  your home in a short sale.

Yes, you do not have to be behind on your payments to do a short sale but. .
when I approach your bank and tell them you are in a hardship. ..they will respond: ” but you are current on your payments”. . We have thousands of files with people behind on their mortgages. .you may have to sit for a while and wait for your turn.

I’m not advocating for you to do a short sale just because you are stuck in a mortgage that will take years to break even much less see a profit. .

All I’m saying the these banks created a major trap for the public because of their greediness. .and now, our Government is giving them billions and billons of dollars to help them correct their ways and save their butts.

A short sale is a piece of the BAIL OUT MONEY for you !

If you have a qualified hardship/. .a short sale maybe the best option for you.

Ok, maybe you decide that a short sale is not an option at this time .. .oryou may already tried doing a short sale with a inexperienced Realtor or a shark investor attempt and now your deal OFF.

This is the next option if all fails. .

#4   A Deed In Lieu Of Foreclosure

Deed in lieu of foreclosure sounds too legal but could be an important step for you.
It simply a negotiated transaction in which the borrower (or a real estate attorney. .  advisable you do this) proposes a settlement to his or her mortgage lender that will enable both the borrower and lender to avoid foreclosure.
However, your lender may still file a deficiency judgment  for them  to recoup their losses . . . and that is only for the first trust.
The junior line or second trust is not obligated at any agreement between you and the first trust.
This can be done efficiently with a good attorney at hand.
My take is that a deed in lieu of a foreclosure benefits the bank more than the home owner.
In a short sale, you have the HIDDEN benefit of remaining on your property for a few months with no mortgage payments saving you thousands of dollars. . in a deed in lieu of a foreclosure. . you are getting out next month  PAYING THOUSANDS OF DOLLARS to your attorney.
In a short sale, you can get complete removal of a deficiency judgment and it costs you nothing to do it.
In a deed in lie of a foreclosure. .it will cost upfront money for the attorney and no guarantees.
Do you want to save money and just do it on your own?
I would be careful what the banks’ attorney will draw up for you to sign. . .remember, they are looking for the bank's best interests. .  not yours.

In the end, you need to make a decision based on your actual needs. .this is just a general advice about your options if you are contemplating a foreclosure.
Which bring us to teh next option . . .

#5   A Foreclosure.

You can just let the lender foreclose if all the above fails. It will definitely ruin your credit, you will have a baggage on you to carry  for the next few years. .no one will give you the best rates for financing and the worst of it is :

you will have a Deficiency Judgment on your head!

Meaning that the bank has the right to go after you and recover any assets you may have now or in the future to recoup  the money that they lost selling your home as a REO property.

That is not good. . .

Add to this, the tremendous strain on your marriage and your health.
You should try to avoid a foreclosure by any means necessary. . . But just one thing to make you feel better if you are heading  to one.
Our country will more likely have over 8,000,000 foreclosed homes before all of this is done. That is 8 million families will be directly damaged by a foreclosure.
Taking in consideration that each family has at least 3 people . .
We are talking about 24 million people will be affected!

The Government and other institutions will have to come to grips and create new ways to helps these families. .
in other words a foreclosure on your record today may not be as bad for you in the future.The Government simply can not ignore 24 Million people and leave them in the curb.

Of course a combination of Option #4 does not come hand and hand with a

BANKRUPTCY . . . . FORECLOSURE’S  UGLY COUSIN !

The worst case scenario .. . you may have to declare bankruptcy to clear the deficiency judgment off your head but then you will end up with a foreclosure and a bankruptcy on your record. .

Double whammy

Not good.. .

Please read below about how we can help you avoid foreclosure at no charge to you.  

No one can guarantee you success in a short sale ..but at least it will open up the road to finally get rid of the tremendous pressure you may find yourself in and face it.

The Dreaded Disclaimer:
I can not legally advice you about any of these options in this publication, I will strongly advice you to seek the professional help from your accountant and your attorney. The decisions you make are life changing and should not be taken lightly.
The reason I wrote this is because, I talk to people almost in a daily basis about their situation. . attorneys, doctors, engineers even including  other Realtors. .. .and just about every day I see people looking at their saving disappear while putting themselves in more harm by borrowing from friends and family . . . .and dig themselves in another hole.

But now is your turn. . .

If only one thing you will take from this. . is that I want for you to take the emotional aspect of losing your property right now. Write down the pros and the cons. . .does it make any sense for you to continue this way?  
From a business perspective. What are your possible losses and what are the possible benefits?
 
And now  take the bull by the horns and do something !

This is not going to get better by simply ignoring it. .

Remember. . selling your home in a short sale is just that. . .selling your home . .
and NOT LOSING IT TO A FORECLOSURE!

Wishing you the best.. Fernando Herboso

Founder of Herboso & Associates
People helping People
“Don’t pray for a miracle. .expect it!”
~Fernando Herboso2009
SHORT SALES
!
0% COMMISSIONS

* The banks will pay all closing costs including all   Realtors  Commissions when you sell. .   
       In A Short Sale !     

0% commissions

Click here to see if you qualify. .. 


Yes, we can sell your home for 0% 

but NOT EVERYONE QUALIFIES. . .

A short sale is not an option for everyone. 

If you are considering a short sale, you must remember that a seller(s) will need to be in a hardship and in financial trouble for lenders to consider a short sale. THEN WE TAKE OVER. . .We will help you present your case to the banks. .The bank will ask you to provide proof of financial hardship and lack of other assets to make your mortgage payments.. .we will help you with all these steps.

One thing that you should now. .

A short sale is the LAST STEP before a foreclosure.

You should try to do a loan modification before you try a short sale.

The reason why a short sale sometimes makes more sense than a loan modification is because . . the refusal of the banks in reducing the principal  to THE ACTUAL VALUE  OF YOUR PROPERTY.

Paying a high mortgage payment for a house that will be underwater for the next 5 to 10 years is insane. . . what are the odds that the Real Estate market will go up 20%, 25% per year like in the past?

The Government (Obama) and the banks would have a heart attack if that happens. .They have learned their lesson.

Most experts are predicting home values to go up at a "HEALTHY" rate of 3% to 5% per year. . The Government and the Banks will control that . .you can bet on that!

Is it a LOAN  MODIFICATION 

or a 

Loan MORTIFICATION ?

A few reasons why a bank could aprove a short sale:
  • Unemployment
  • Reduced Income
  • Divorce
  • Separation
  • Medical Bills
  • Too Much Debt
  • Death of my Spouse
  • Death of a family member
  • Payment Increase
  • Business Failure
  • Job Relocation
  • Illness
  • Damage to Property
  • Military Service
  • Incarceration
  • Call us for a quick consultation. .240-426-5754

"If you qualify for a SHORT SALE . . .

we will charge  YOU NOTHING TO SELL IT!"

~Fernando Herboso 

President of Herboso & Associates

short sales maryland
Fernando Herboso
Herboso & Associates
                                   Realtor/Short Sale Consultant
                                                      KEY REALTY GROUP  LLC

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Fernando Herboso
Herboso & Associates
Realtor/Consultants
Key Realty Group LLC
Cell: (240)426-5754
www.ReallyNiceHomes.com
Click to Talk to Fernando Herboso!
Disclaimer: This information is not intended to be or to provide legal advice. We recommend that you speak to your attorney and your tax accountant regarding specifics about your own situation to find out if this is the best option for you at this time.
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