Short Sale Options in El Dorado Hills
Know Your Options
If you feel upside down and are not sure what to
do, it is very important to educate yourself on your options. Try to look at the situation without attaching your
emotions. If viewing the situation from a strictly business viewpoint, you can more successfully analyze which
option might best suit your needs and desires and move you towards resolving your financial difficulty. One very
important thing to remember: Time is of the essence, so sit and take serious thought of your situation and take
quick action in order to allow yourself enough time to complete the chosen process.
Nine options when facing
1. Do nothing –
If a homeowner does nothing they most likely will
lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed
upon. Credit reports also disclose this damaging information. Not the recommended option.
2. Payoff/Refinance –
Completely paying off the entire loan amount plus
any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a
normally higher interest rate and there may be a prepayment penalty because of the recent default. With this
option, there should be equity in the home. 3. Reinstatement – Paying the entire default amount plus interest,
attorney fees, late fees, taxes, missed payments and fees.
4. Loan Modification –
Utilizing the existing mortgage company to
refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable
level. To qualify, you must prove to the lender you have fixed the problem that caused the late
5. Forbearance –
Lender may be able to arrange a repayment plan
based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction
or suspension of payments. Information will be required from the lender to show that you are able to meet the new
payment plan requirements.
6. Partial Claim –
A loan from the lender for a 2nd loan ot include
back payments, costs and fees.
7. Deed in Lieu of Foreclosure
Give the property back to the bank instead of the
bank foreclosing. Banks generally require the home be well maintained, all mortgage payment and taxes must be
current. Most loan applications ask if this has ever happened.
8. Bankruptcy –
This option can liquidate debt and/or allow more
time, and requires an attorney.
Chapter 7 (liquidation) –
To completely settle personal
Chapter 13 (wage earner plan)
Payments are made toward a plan to pay off
debts in 3-5 years.
Chapter 11 (business reorganization)
A business debt solution
9. Short Sale –
If the property has equity (money left over after
all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a
conventional home sale. In this case, the homeowner will get cash from the sale. On the other hand, a Short Sale,
also known as a pre-foreclosure sale, can be negotiated with your lender by our Real Estate Professionals if what
is owed is MORE than the property’s value.