Short Selling Your Cameron Park Home

What is a Short Sale?

A short sale is a negotiated settlement in which a short pay occurs, and a lender agrees to accept less than the amount owed to payoff a home loan as an alternative to foreclosure. The lender often agrees to a short sale because they know if they take the property back through foreclosure they will often incur and even greater loss.

eCurb Realty / ForeclosureOptions.com has experience convincing lenders that they will do better if they take less than what is owed now, rather than taking the property back through foreclosure and trying to sell it later. Keep in mind, not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense for the lender to foreclose.

Example of a Short Sale: The Cameron Park homeowner in foreclosure has an unpaid home loan balance of $200,000. eCurb Realty / ForeclosureOptions.com completes the short sale package with the seller. Once an offer is received, we negotiate with the lender on behalf of the seller. We get the lender to agree to accept an offer of $115,000 as payment in full. The home is sold to the new buyer and the seller’s credit shows loan paid in full. Many lenders are now reporting short sales as ‘paid as agreed, less than what was owed’. The bottom line however is you did not simply abandon your debt, you settled it.

In some cases, a second or even a third mortgage may exist on the property. When this occurs, the process becomes much more complex. We will need to negotiate between the existing lenders as to the actual payoff amount they are willing to accept in relation to the other lenders .

Cameron Park Short Sales & Bank Owned Homes in Cameron Park

This site is primarly for homeowners facing foreclosure in Cameron Park.  If you are looking to purchase a short sale in Cameron Park or an Cameron Park bank owned home, please visit www.eCurbRealty.com for direct links to these properties.

How does eCurb Realty / ForeclosureOptions.com get paid?

We will negotiate directly with the bank for all real estate agent commissions, which incidentally, are taken out of the sales proceeds and not added on top. In most cases, the bank will offer the listing agent a smaller than average fee for performing the marketing and negotiation responsibilities associated with representing a seller. Regardless of our actual commission, eCurb Realty will provide our Cameron Park short sell clients with the full service and marketing dedication that we guarantee to all of our loyal clients.

How Long Will it Take?

The short sale negotiation process can often be a lengthy one. Remember, it is actually two different elements. The first is the traditional real estate side (listing the home, choosing offers, etc.). The 2nd element is the negotiation with your current lenders. Both of these take place simultaneously. It may take several weeks to months before a lender and home owner can agree on acceptable terms. Many lenders have thick layers of bureaucracy, insurers and investors that we will have to maneuver through in order to get your short sale approved. We understand how painful your original situation may be, so we make a special point to communicate with our sellers on a regular basis as we go through this grueling process.

But My House Is Going to Foreclosure, Will I have Enough Time?

Starting a short sale will not automatically stop the lender from starting the foreclosure process. However, we have successfully convinced lenders to postpone a foreclosure while we negotiate a short sale. While there are no guarantees, we will do everything that we can to get your Cameron Park area home sold before the lender follows through with their foreclosure. It is important to contact us as early as possible to increase the opportunity for a successful outcome, but even if you’re well behind, there may be a chance to help you. One thing we will do is monitor the situation with your lender closely, so you are not displaced without knowing the timeline.

Can I Stay in the House?

The key word in short sale is SALE. The purpose of a short sale is to get your Cameron Park property sold. So, you will be moving. This is not a program that can stop a foreclosure and allow you to keep the house indefinitely. It will be easier to sell the house if it is vacant, but if you cannot move out of the home for financial reasons, at least make sure the home is easily accessible to potential buyers.

How Do I Know This Will Work?

Be very cautious of anyone who offers a guarantee that they will be able to negotiate a short sale. We will not make any promises to you that a short sale will work. Once you missed a payment, the lender is in charge and can proceed with foreclosure if they decide on that option. However, in light of the current real estate market, lenders are aware that they might have a better chance of selling a home via short sale instead of reclaiming the property in a foreclosure.

Will I Get Any Money From the Sale?

No. A universal requirement of the lenders in granting a short sale is that the borrower will not get any proceeds from the sale of the property.  Some programs like HAFA and some lenders like Wachovia may  have incentive payment options available upon a successful short sale, we cannot determine that until we have a consultation and see who owns your loan(s).

What Happens if This Does Not Work?

If you are facing foreclosure, the mortgage lender may be willing to work out a payment arrangement plan with you. Ultimately, if nothing is worked out, the home will foreclose.

What is a Release?

A lender may offer to release its security interest against the property in exchange for less than the total amount of the note. A release will allow the property to be sold without paying off the obligations of the note. However, the note is not satisfied.

Advantages: This successful short sale will allow the property to be sold and thus avoid foreclosure.

Disadvantages: The remaining debt on the property (sometimes called a deficiency*) still exists. You are still liable for the note – in other words – you still owe the money. This is most common on refinanced 2^nd loans as California is a non deficiency state in regards to 1^st loans.

What is a Satisfaction?

A lender may agree to accept less than it is owed as complete and total satisfaction of the note and release its lien against the property. In the eyes of the lender, the debt is now completely settled.

Advantages: Your note and obligation to the lender are satisfied for less than you owe. When the property is sold, the debt is paid off completely.

Disadvantages: You may have some tax consequences that you should discuss with your tax advisor due to the fact that the lender is making money you owe disappear. Sometimes our negotiations are successful in obtaining a satisfaction. Sometimes all we can get is a release.

Will This Have Any Impact on my Taxes?

On December 20th, 2007, President Bush passed “The Mortgage Forgiveness Debt Relief Act of 2007” which allows Homeowners a (3) year window to avoid paying taxes on the loss the lender takes. Before this act took effect, “If the value of your house declined, and your bank or lender forgave a portion of your mortgage, the tax code treated the amount forgiven as income that can be taxed.” According to “The Mortgage Forgiveness Debt Relief Act of 2007” if you sell your home as a short sale by December 20th, 2010, the loss the lender takes may not be considered taxable income by the IRS.

On April 12, 2010, SB 401, the Conformity Act of 2010 was enacted for California. It allows taxpayers who had all or part of the loan balance on their principal residence forgiven by their lender to exclude the forgiven debt from California gross income. The new law applies to discharges of qualified principal residence indebtedness on or after January 1, 2009, and before January 1, 2013.

The IRS often gets involved with short sales because they are seen as a relief of debt and may be treated as income. Please check with your tax professional and let them know about “The Mortgage Forgiveness Debt Relief Act of 2007.” You will need a tax advisor who is proficient with the ramifications surrounding a short sale, and we encourage all of our clients to see competent tax and legal advice.

What type of paperwork do I need?

The lender will require a view of the financial package that usually includes:

• (2) Months’ bank statements
• (2) Months’ pay stubs
• (2) Years’ IRS tax returns
• (1) Hardship Letter
• (1) 3rd party authorization form, allowing your agent to contact your lender on your behalf

The leading cause of delay and even denial of our offer to the lender is caused by the seller failing to deliver these items in a timely manner.

Experienced Cameron Park Short Sale Team

ForeclosureOptions.com and eCurb Realty are successfully selling Cameron Park short sales, feel free to check out our blog for some recent success stories.  Our short sale process enables us to streamline the process for our Cameron Park homeowners in distress and to relieve their stress through this process.  You can contact the Foreclosure Options team at eCurb Realty for a confidential consulation at 916-226-2700.  Your information will be held in strict confidence.  Members of Foreclosure Options and eCurb Realty have been awarded various short sale certifications including CDPE, Five Star Short Sale Certification, SFR and several other industry designations to assist with your Cameron Park short sale.