You may know of someone who is struggling financially who may want to give up, or already has. I encourage you to check into a few options. My hope is to be able to provide any information for questions that you, or others you know, might have.
Very few understand what banks will provide as options to home owners facing financial difficulty and mortgage default on their home. Foreclosure occurs when a bank takes a property back from a borrower. After a borrower has defaulted on their loan for 90 days, a bank will post a Notice of Default (in judicial states) prior to another 90 days after which the bank will typically post a foreclosure date. A foreclosure may affect your credit by as much as 150-250 points and remain on your credit for up to 5 years. In Utah, lending institutions (banks) may exercise their right to pursue a deficiency judgement for the remaining loan amount. Banks tend to be easier on the borrower if you do what you can to minimize their losses through a short sale.
A short sale is when a bank is willing to take less than is owed on the mortgage. This involves a home sale cooperating with a realtor and does not require the seller to pay any losses or closing costs. This is a much better option for your credit than a foreclosure affecting your credit 50-150 points depending on your payment status. In fact, a bank would rather do a short-sale than foreclose in order to mitigate further losses.
Often in foreclosure, the second mortgagor may come after the borrower to recover losses. There can be recourse from a bank should a home go into foreclosure.
My start in the residential real estate market 10 years ago began in working pre-foreclosure, short-sales. The process of negotiating with the bank is somewhat fulfilling to me while I have the chance to help those with whom I am working. The process is not easy, but the outcome is rewarding with a win-win resolve for the bank and home owner.
Please call or e-mail me if you have questions.
All the best,
Dallin
Dallin B. Nelson
Real Estate Short Sale Specialist
(801) 830-3930 direct
(801) 995-4717 fax
(888) 447-6254 toll free
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