|
| Q: |
Can a home seller sell a home for less
than its mortgage? |
| A: |
This situation is known as
a "short sale." Sometimes home owners can negotiate with
lenders and have them split the difference between the sale price and
loan amount, which still must be paid.
A short sale may be complicated if the loan has been
sold to the secondary market because then the lender will have to get
permission from Fannie Mae or Freddie Mac, the two major
secondary-market players.
If the loan was a low-down-payment mortgage with
private mortgage insurance, then the lender also must involve the
mortgage insurance company that insured the low-down loan.
Resources:
* "How to Fight Foreclosure," Jeff Jensen, Jensen
Publications, 200 Main Street, Suite 104-201, Huntington Beach, CA
92648; (714) 843-0321.
|
|
| Q: |
How does someone sell a slow mover? |
| A: |
Even in a down market,
real estate experts say that price and condition are the two most
important factors in selling a home.
The first step is to lower the price. Also, go through
the house and see if there are cosmetic defects that you missed and can
be repaired.
Secondly, home sellers should make sure that the home
is getting the exposure it deserves through open houses, broker open
houses, advertising, good signage and a listing on the multiple listing
service (MLS).
Another option is to pull the home off the market and
wait for the market to improve.
Finally, frustrated sellers who have no equity and are
forced to sell because of a divorce or financial considerations could
discuss a short sale or a deed in lieu of a foreclosure with the
mortgage lender.
A short sale is when the seller finds a buyer for a
price that is below the mortgage amount and negotiates the difference
with the lender.
In a deed-in-lieu-of-foreclosure situation, the lender
agrees to take the house back without instituting foreclosure
proceedings. But these would be considered more radical options than
lowering the price.
|
|
| Q: |
How does a home go into foreclosure? |
| A: |
Foreclosure proceedings
usually begin after a borrower has skipped three mortgage payments. The
lender will record a notice of default against the property. Unless the
debt is satisfied, the lender will foreclose on the mortgage and proceed
to set up a trustee sale. |
|
| Q: |
When does foreclosure begin? |
| A: |
Lenders will initiate
foreclosure proceedings when homeowners become delinquent in their
mortgage obligations, usually after three payments are missed. The
lender will then notify the buyer in writing that he or she is in
default. The lender can request a trustee's sale or a judicial
foreclosure, in which the property is sold at public auction.
A borrower can cure the default by paying the overdue
amount and the pending payment after the notice of default is recorded,
usually no later than a few days before the property's sale.
Some sales allow the successful bidder to take
possession immediately. If the former owner refuses to vacate the
premises, the court can issue an unlawful detainer that allows the
sheriff to come out and evict them.
Borrowers should do everything they can to avoid
foreclosure, which is one of the most damaging events that can occur in
an individual's credit history.
|
|
| Q: |
How long do bankruptcies and
foreclosures stay on a credit report? |
| A: |
Bankruptcies and
foreclosures can remain on a credit report for seven to 10 years.
Some lenders will consider an borrower earlier if they
have reestablished good credit. The circumstances surrounding the
bankruptcy can also influence a lender's decision. For example, if you
went through a bankruptcy because your employer had financial
difficulties, a lender may be more sympathetic. If, however, you went
through bankruptcy because you overextended personal credit lines and
lived beyond your means, the lender probably will be less inclined to be
flexible.
|
|
Copyright 1999 Inman News Features
|
