Philadelphia Short Sale

Can I Short Sale My Property To A Family Member?

The short answer to the question of whether you can short sale your property to a family member or friend is generally “no”.  While it technically depends on the short sale lender’s requirements – nearly all lenders will require that you sign an arms-length affidavit as part of the short sale process.

Why Does The Lender Require An Arms Length Affidavit?

The primary reason banks want to prevent short sales to family members of the homeowner is to prevent sellers from profiting from the short sale, as well as to prevent short sale fraud.  In many cases involving non-arms length short sales, the relative or friend is simply acting as a “straw buyer”.  The lender wants to prevent a situation where the seller makes an unofficial side agreement with a relative or a friend where the friend or relative will purchase the house in a short sale, then transfer title back to the seller once the transaction has closed, and the seller has been granted forgiveness for the deficiency.

In this situation, the seller would not only have gotten their house back, but they will have been able to avoid foreclosure, keep their home, and had their debt forgiven.  Essentially, the initial homeowner gets their debt forgiven and also gets to keep their house.

Arms Length Affidavits & Fraud

In addition to preventing sellers from taking advantage of short sales to keep their home at a loss to the lender, mortgage lenders use arms length affidavits to combat outright mortgage fraud.  In these cases, the short sale arms length affidavit isn’t designed to stop a relative or friend from trying to help out a distressed homeowner by purchasing their property and renting or selling it back to them – it is put in place to stop dishonest sellers, short sale realtors, short sale negotiators, and even appraisal agents from working together to defraud lenders.  While nothing about signing
arms length affidavits will stop those determined to commit mortgage fraud, the arms length takes away any legal gray area and gives the parties nowhere to hide from prosecution if the lender later discovers collusion between the parties.

Secret flipping deals are one example of the type of short sale fraud that arms length affidavits are designed to combat.  This is where the borrower or the borrower’s agent may hide a higher offer from the mlender and use a straw buyer – such as a friend or family member – to act as buyer in a short sale.  The borrower can then flip the property to the outside buyer, potentially reaping tens of thousands of dollars in profit that should have rightfully gone to the lender.

Another example of short sale short sale fraud is committed by dishonest short sale negotiators/Realtors and broker price opinion (BPO) agents.  BPO agents are hired by the lender to assess the value of the property in question so that the lender can make an informed decision on whether or not to approve the short sale.  However, some short sale negotiators or Realtors will make secret agreements with dishonest BPO agents, asking them to offer lower valuations, fabricate issues with the property in question, and otherwise push the reported value of the home downward so that the negotiator can have a straw buyer purchase the property at a lowered value and flip it at the home’s actual market value.

What Clauses Are Included In A Short Sale Arms Length Affidavit?

An arm’s length transaction affidavit will include numerous terms designed to prevent the seller from selling their property to a straw buyer, make hidden agreements, or move back into the property.  The arms length affidavit will also usually require disclosure of any other contracts or agreements that the seller may have regarding resale of the property.  While the actual clauses and language of an arm’s length affidavit will vary from transaction to transaction and lender to lender, here are some of the basic clauses you will need to include in an arms-length affidavit for the lender to approve your short sale:

• None of the parties in the short sale contract
  are family members or business associates of the seller, nor do any of them
  hold a shared business interest with the seller.
• There are no hidden contracts or agreements
  between the buyers, sellers or the agents in the transaction
• The seller agrees not to rent back the home or
  retake title once the short sale closes
• None of the parties in the short sale contract
  are receiving compensation for their part in the arm’s length transaction,
  except for the realtor who receives a commission

In addition to the terms of the affidavit, according to Freddie Mac, best practices for a short sale arm’s length affidavit should include the following elements:

• The name of the servicer
• The property address
• The servicer’s loan number
• The notarized signatures of the seller(s) and
  buyer(s)
• The notarized signatures of the seller and
  buyer’s realtor
• The notarized signatures of the closing/escrow
  agent or the lawyer who performed the closing
• The notarized signature of any 3^rd
  party short sale negotiators (if applicable)

What Are The Legal Consequences Of Violating An Arms Length Affidavit

The legal consequences of knowingly violating an arms-length affidavit are extremely severe.  The violation could be classified as mortgage fraud – which is a federal offence – and investigated by the FBI.  If you want to stay out of jail and avoid paying crippling fines and damages, it is highly advised that you don’t attempt to get around the provisions of an arms-length affidavit, and to consult a lawyer if you are planning anything that could remotely be perceived as violating the terms of the arms length affidavit.

Ultimately, no American lender in this day and age will approve a short sale without an arms-length affidavit with terms in place to protect the lender from mortgage fraud.  This can be unfortunate in situations where a relative or friend wants to help out their loved one in need by purchasing their home and renting it back to them.  However, whether the  intentions are pure and noble or purely for profit, the wording of standard arms length affidavits will any short sale between non-arms length parties, hidden agreements, or any situation where the seller moves back into the home after the short sale.

It’s very important to make sure you have a trustworthy, knowledgeable, skillful and most importantly, experienced Short Sale Specialist Realtor with you during your short sale. Contacting one of our agents right now will help you with anymore questions you may have. Don’t worry, it’s free and so are our services for your short sale! Can’t beat that, so contact us now!

Wells Fargo Mortgage Short Sale Process

Do you want to stop foreclosure? If yes is your answer you might be considering a short sale. Wells Fargo clients can take comfort in knowing that Wells Fargo is one of the highest lenders in approvals of short sales. They make communication easy and simple, so that completing the Wells Fargo short sale process is as fast as possible. So what do you need to know?

The first step is to find you an agent who is willing to work with short sales. There are real estate agents who are short sale specialists and will guide you through the path of having a successful outcome. These specialists will speak on your behalf and assist in selling the home.

Once you have a short sale specialist to guide you along the way, they will ask you to compile a list of documents to make your Wells Fargo short sale package. These documents each show proof that your claims are true and you can no longer afford your home.

You will first need a hardship letter. This letter is the explanation of the event that set you behind. Acceptable hardships include:

Illness- this can result in extra medical cost and fees that were not planned.

Loss of Income- You may be the only provider or you may have a series of contributors that make your cost of living possible. If yourself a contributor or yourself has lost a job and has resulted in less over all money going into making your payments possible.

Reduced Income- This can be from a contributor or yourself taking an unexpected cut in pay.

Death- This is from a death of an immediate family member or close friend resulting in funeral costs, the flights to attend, or any additional costs that may result from the death.

Incarceration- this is from the lack of freedom to financial control as well as court costs and fees

Divorce- This is when a Co-Borrower no longer contributes to the payments as well as lawyer fees and ext.

Marital Separation- When the Co-Borrower is no longer contributing to the payments on the mortgage

Property Damages- This can be unnatural (car crashing into home, ext.) or natural (hurricane, earth quake, sink holes, ext.)

Additional documents required for the Wells Fargo short sale process are:

• 3 months of all current bank statement (to prove your spending on necessities)
• 1 month of current paystubs (to prove claimed income)
• Your last year’s tax returns and W-2’s (to show proof  of all income claimed currently or prior to hardship)
• Financial statement (to show income vs. expenses)

You may be interested in the (HAFA) Home Affordable Foreclosure Alternative. This government backed program has incentives in $3,000.00 in relocation assistance. Contact your short sale specialist at 1-877-737-4903 for HAFA program guidelines.

Our network of nationwide realtors who specialize in short sales will assist in the sale in your home; their primary job is to help you avoid foreclosure. This is at no cost to you! Wells Fargo will pay the traditional seller closing costs and brokerage fees.

Philadelphia Distressed Property Experts

Distressed Property Experts are qualified agents in understanding distressed homes and the complications and avenues that come with it. Distressed Property Experts will work with the lenders and the agents to find options as an alternative to foreclosure.Distressed Property Experts are both knowledgeable with the lender and the real estate industries; this gives an advantage to the home owner when having to deal with options like short sales.

Why would you choose to use a distressed property expert? When your home becomes distressed, (meaning that you have fallen behind in your payments and in serious cases are facing foreclosure), then you have a series of options you may not know are available to you. When you are trying to make sense of how to handle the business end of it all your personal attachment to the home may make you stressed and worried leading to rushing paperwork and potentially disqualifying programs available to you. Dealing with lenders is hard because they often don’t sympathize with your hardship issues and it becomes about the money owed and less about how to help you. A Philadelphia Distressed Property Expert can show you the available options to help avoid foreclosure and help guide you through the steps. Distressed Property Experts will manage with a clear head in moments of stress as they have done this process time and time again.

One of Distressed Property Experts specialties is short sales. Short sales haven’t always been popular; it wasn’t until the market was bad that lenders were starting to accept them. Now lenders suggest short sales as a regular alternative to foreclosure. Many realtors have been around before short sales were so common and have yet to learn the ins and outs. A short sale is where you owe more on the property than what the home is worth in the current market and where a lender agrees to accept less than the full balance of the mortgage at the close. This is a great alternative to losing your home.

Distressed Property Experts set their selves apart by being one of the few groups of people who are fluent in short sales by the training they took to become certified in dealing with distressed homes.  When speaking with your lender they may even suggest searching for a distressed property expert.

Conclusively, distressed property experts are gems to the real estate and mortgage industry and may even be the key in making options successful. They are useful, knowledgeable tools to fixing long term situations and are available to anyone.

If you are interested in finding a Distressed Property Expert locally call one of the short sale specialist experts for more information: 1-877-737-4903.

While it is important to have a trained short sale specialist there is no substitute for experience. To contact us today to get in touch with a experienced short sale specialist call 1-877-737-4903

With the real estate market flooded by short sales and foreclosures mainly due to plummeting property values, many homeowners are concerned about certain short sale confidentiality issues. They fear that their agents may conspire behind the scenes to process the deals in such a way that will benefit only their own pocket books. Furthermore, they are also worried about the possible disclosure of their financial weakness. However, it is the moral, ethical and legal obligation of real estate agents to not share any confidential information of their clients until they have obtained written permission.

The Listing Agreement is Confidential

When a contract is signed between you and your chosen short sale Realtor, it is implied that both the parties would perform in good faith, without causing each other to suffer damages. Among other terms of the agreement, it is also included in the contract that the information regarding a homeowner and his property would be confidential, and that disclosing any information that could jeopardize the Philadelphia short sale deal or hurt the seller’s self respect would be tantamount to disregarding and breaching the mutual contractual obligations.

Obligations of Listing Agent

A Philadelphia listing agent who works on behalf of the seller must tell you fairly everything he can find out about the prospective buyer; about his loan eligibility and financial condition. On the other hand, he is under legal obligation to not disclose anything that could help the buyer gain any advantage, like impending foreclosure, seller’s need to move in a hurry, or his need to sell the house to settle divorce, etc.

In addition to withholding this personal information, it is also the duty of Realtors to not market the property as a distressed sale. They should present a house to the market based on its features, not on the vulnerabilities of the sellers. So while facilitating the sellers with a smooth confidential short sale transaction, the protection of personal details by Realtors also appears to be of great importance, especially in conditions wherein the sellers are already hard-pressed financially.

Obligations of Buyer’s Agent

Real estate agents also work for buyers and help them get a house in a short sale for as less price as possible. Here the agent needs to keep all information about his client confidential, including his ability to pay more than the quoted price for the property and his motivation for buying.

Confidentiality after the Agreement Expires

The previous agreement protecting communications between a client and his agent keeps those communications confidential over an extended period of time. For instance, your agreement with a listing agent expires and you re-list your house with a new agent, your previous agent could not act as a buyer’s agent provided that he had signed a continuing duty of confidentiality in the expired agreement. Home sellers are conscious about this term because in the absence of this condition, the knowledge held by the previous agent can breach the new short sale deal.

In a short sale deal, the agent is legally obligated to safeguard your lawful home buying or selling secrets. Any leakage that could jeopardize the bargain will be considered a breach of agreement. No matter if he is working for a seller or a buyer, he has to represent his client in a fair manner. All of this goes to show that short sales are confidential real estate transactions.

Many American homeowners are finding it difficult to hold on to their underwater homes because of a decrease in income or some other type of financial hardship. A short sale offers solutions to these delinquent borrowers!

When a lender allows a borrower to sell their home for an amount that will not fully satisfy their loan, a short sale takes place. In order to qualify, borrowers must prove to their lender that they can no longer afford the property because of job loss, divorce, medical expenses, or other similar situations.

Hiring a Montgomery County PA short sale Realtor to handle your transaction is the best first step. This short sale specialist should guide you through the entire process charging you nothing along the way. Your Realtor’s commission, as well as all other closing costs, will be paid by your lender.

In most cases, lenders forgive borrowers of the deficiency amount (the difference between the sale price and the loan’s balance) but this is not necessarily an automatic. Some lenders are even offering borrowers relocation money to encourage short sales over foreclosures. A short sale will cause some damage to your credit, but this is much easier to recover from than the damage caused by a foreclosure. In some cases, borrowers’ credit actually improved shortly after the transaction.

Starting the Pennsylvania short sale process as soon as possible is a great idea. The largest hit to your credit comes from missed mortgage payments rather than the transaction itself. Therefore, the quicker your home sells, the less payments you’ll be behind, and the less your credit will drop.

www.Short-Sale-Specialists.com

877-737-4903

Ask a local short sale specialist!

Are you looking for a Montgomery County PA short sale Realtor? Look no further! Our stop Pennsylvania foreclosure specialists provide FREE short sale expert services to Montgomery County PA homeowners in hardship. Call today to see if you qualify for a short sale! Need a Montgomery County PA Distressed Property Expert in short sales to offer free Chase short sale services? Our Montgomery County PA area Distressed Property Expert real estate agents are here to help, and are Certified or training in the Pennsylvania Home Affordable Foreclosure Alternatives, or HAFA Government short sale program.

Our organization does NOT directly offer short sale or foreclosure rescue services in the state of Pennsylvania. CLICK HERE for more information on our services.

Copyright First Coast Realty Associates 2011

Foreclosure is an embarrassing legal process pursued by lenders if the borrower becomes default on his mortgage agreement. The consequences of this process on the financial status of the borrower are far reaching and often irreparable. In addition to losing the home, the debtor has to suffer from a bad credit score, a deficiency judgment, ineligibility to obtain a new mortgage loan, and on the top of it all, mental dejection and sense of guilt.

Careful management of financial circumstances and wise decision-making can help the homeowners avoid getting to this stage and secure a number of benefits. Following are some alternatives to foreclosure.

Restructure your Budget:
First of all, review your loan agreement and see if you can restructure your budget and income. Also go through your monthly expenses and determine if you can save some money by eliminating unnecessary spending. And finally, reassess your financial status taking into account both your income and expenditures. Do your best to spare some income for rainy days to avoid any risk that may come out of the blue.

Apply for Loan Modification:
On determining that carrying your mortgage loan is very difficult owing to your financial hardship, you can apply to your bank for a loan modification. A loan modification is referred to any change taking place in the loan agreement that has been previously signed with the consent of both parties. The loan modification process may result in reducing your overall loan balance, decreasing interest rate, and increasing the loan term. All of these relaxations individually or collectively play a vital role in stopping foreclosure.

Submit a Short Sale Request to your Bank:
If the loan modification proves unsuccessful, go for another option that is currently sought after by a large number of homeowners. Request that your bank approves a short sale on your property. Mention in the application that you are no longer in a position to carry on with your mortgage. If this option works successfully, you will lose your home but also the liability of mortgage payment. This is a considerably long and tricky process which needs to be handled by an experienced short sale Realtor who can help you get through the process easily.

Submit a Forbearance Application:
Given that you are undergoing rainy days, you can persuade your bank to temporarily halt the legal action. Just convince your bank that you are suffering from financial hardship due to joblessness or serious ailment. The lender, out of compassion, may agree to give you relaxation in the form of forbearance. It means you will be allowed to retain your home without making payments for a limited time and then continue paying the due loan after getting a job or recovering from the disease.

www.Short-Sale-Specialists.com

877-737-4903

Contact a local short sale expert.

Are you looking for a Philadelphia PA short sale Realtor? Look no further! Our stop Pennsylvania foreclosure specialists provide FREE short sale expert services to Philadelphia homeowners in hardship. Call today to see if you qualify for a short sale! Need a Philadelphia PA Distressed Property Expert in short sales to offer free Chase short sale services? Our Philadelphia area Distressed Property Expert real estate agents are here to help, and are Certified or training in the Pennsylvania Home Affordable Foreclosure Alternatives, or HAFA Government short sale program.

Copyright First Coast Realty Associates 2011

Our organization does not directly offer short sale or foreclosure rescue services in the state of Pennsylvania.

A short sale takes place when a lender agrees to receive less money as compared to the balance owed by his borrower. When the borrower cannot control his monthly payments and is also perturbed by the increasing difference between what he owes on the property and its actual worth, he persuades the lender to agree to short sale the house and suffer the loss (the difference between the balance and market value). A lender agrees to suffer this loss because he wants to shun greater loss that would be incurred through a foreclosure.

A short sale is often considered to be a solution to financial problems, but in fact it is accompanied by a host of other problems such as a decrease in credit scoring and others. Qualification for a short sale means complying with certain conditions that pave the way for the short sale process.

• Mortgage is higher than the market value of the home
  • The home’s worth must be lower than the mortgage loan. Until this condition is found, short sale of the home cannot take place.

• The borrower is about to default
  • Earlier on, it was customary to approve the borrower’s request for a short sale only after his becoming default on the mortgage. Nevertheless, this trend has been changed owing to many other factors that can contribute to the default status of a person. Now lenders frequently adhere to the option of a short sale.

• The borrower is facing hard times
  • In order to get a short sale request approved, the borrower needs to supply an application mentioning that he has been suffering from financial hardship which disables him from enduring the monthly mortgage payments. Here, mentioning genuine reasons of financial hardship is very necessary; reasons such as bad neighborhood or purchasing a new home will not be entertained. Unemployment, relocation, medical emergency, death, and bankruptcy are some of the examples that can fit the bill.

• The seller possesses no assets
  • The seller should also convince the lender that he does not possess any assets. This he will do by submitting a copy of his financial statement. This will prove that he is really in financial duress and has no resources to carry on with his mortgage loan. However, if the seller is found to have possessed, for example, stocks, bonds, or some other real estate, the lender will most probably refuse the short sale application and will not consider the seller to be in the state of “underwater”.

• Buyer’s offer and lender’s acceptance
  • This condition is related to the completion of a short sale. When a short seller succeeds in finding a buyer who shows his willingness to purchase the home and makes an offer, it is then necessary that the lender agrees to this offer. The buyer’s offer and the lender’s acceptance both are compulsory to accomplish a short sale.

Qualifying for a Pennsylvania short sale is dependent on the fulfillment of these conditions. Once a short sale is accomplished, you will more than likely see a decrease in your credit score. However, since the short sale is reported as “settled in full” or “paid as negotiated,” the sale will not harm your future mortgage interest rates. Additionally, your short sale Realtor will work hard with your bank to make sure you are completely forgiven of any deficiency that may remain after the sale. Contact a local Philadelphia short sale specialist today for more information and to see if you qualify!

www.Short-Sale-Specialists.com

877-737-4903

For more information on the short sale process or to receive a free evaluation of where your home stands in today’s market, fill out the form below.

Are you looking for a Philadelphia PA short sale Realtor? Look no further! Our stop Pennsylvania foreclosure specialists provide FREE short sale expert services to Philadelphia homeowners in hardship. Call today to see if you qualify for a short sale! Need a Philadelphia PA Distressed Property Expert Certified in short sales to offer free Chase short sale services? Our Philadelphia area Distressed Property Expert Certified real estate agents are here to help, and are Certified or training in the Pennsylvania Home Affordable Foreclosure Alternatives, or HAFA Government short sale program.

Copyright First Coast Realty Associates 2011

Our organization does not directly offer short sale or foreclosure rescue services in the state of Pennsylvania.