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Orange County Short Sales: If You Have Not Missed a Payment Will a Short Sale Work For You?
- By Fred Sed
- Published 06/29/2008
- Real Estate Success
- Unrated
Fred Sed
Fred Sed of The Pahua Group specializes in buyer & seller representation of foreclosures/bank owned REOs and tenant representation of Orange County Rental Properties. Fred also specializes in the representation of homeowners in distress by way of Short Selling. For more about Fred visit: http://activerain.com/fredsed and Short Sale FAQs.
Most of the time when a short sale is approved or when the process has just begun the home owner has already had a notice of default filed against them, meaning they already missed about three payments and have entered the foreclosure process, or they have just missed 1-3 payments.
For a short sale to be looked at as a possibility by the bank once of the two above examples must be present. So if you have yet to miss a payment and have not entered the foreclosure process then it is difficult for the bank to classify you as a short sale candidate. I am not saying that it is not possible for this scenario to occur, just that the chances are slim.
They key qualifying factor of a short sale is financial hardship. In you are a homeowner who is in default and would like to have the bank approve a short sale, you must show financial hardship. This means the loss of a job, a reduction in income, any hardship that is holding you back from being able to make your payments.
If you are working and are able to make your mortgage payments, but just don't want to because the value in your home has dropped the option isn't there. In this situation you cannot qualify for a short sale. You might have heard that banks are desperate and need money so they are cutting prices of their properties just to get them sold as soon as possible. But that is not true when it comes to homeowners who are in default and are still in possession of the property.
Banks will do all that they can to try and make the homeowner pay the balance in full. When they have tried every option then they resort to a short sale.
For a short sale to be looked at as a possibility by the bank once of the two above examples must be present. So if you have yet to miss a payment and have not entered the foreclosure process then it is difficult for the bank to classify you as a short sale candidate. I am not saying that it is not possible for this scenario to occur, just that the chances are slim.
They key qualifying factor of a short sale is financial hardship. In you are a homeowner who is in default and would like to have the bank approve a short sale, you must show financial hardship. This means the loss of a job, a reduction in income, any hardship that is holding you back from being able to make your payments.
If you are working and are able to make your mortgage payments, but just don't want to because the value in your home has dropped the option isn't there. In this situation you cannot qualify for a short sale. You might have heard that banks are desperate and need money so they are cutting prices of their properties just to get them sold as soon as possible. But that is not true when it comes to homeowners who are in default and are still in possession of the property.
Banks will do all that they can to try and make the homeowner pay the balance in full. When they have tried every option then they resort to a short sale.
