Chicago IL – There are many reasons to use a short sale to stop foreclosure. If you want to keep your home, then you need to attempt a loan modification. If you do not want to keep your home, then you need to consider your options.
There are 3 options if you do not want to keep your home. Option #1: Do nothing and the lender forecloses on the house. Option #2: Deed in Lieu of Foreclosure. I don’t recommend this as detailed in yesterday’s column on Deed in Lieu. Option #3 is a short sale.
Here are the benefits a short sale offers over a Foreclosure or Deed in Lieu.
Will you be able to buy another home in the future?
Current Fannie Mae Guidelines allow you to purchase another house 2 years after a short sale. Fannie Mae is the most common loan people get and most lenders have policies similar to them. After a foreclosure, the current Fannie Mae Guidelines require you to wait 5-7 years before getting a new loan.
How will a short sale or foreclosure affect my ability to get a loan in the future?
If you short sale, then you can state “No” because you short sold your home. You only have to say yes if the bank completes the foreclosure. After a foreclosure any future application will require you to answer the question, “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” you’ll have to answer that question yes.
How will my Credit Score be impacted?
After a short sale, the mortgage is normally reported as “paid in full, settled.” So the biggest impact will be from late payments. This lowers your score as little as 50 points if all other payments are being made. Most lenders review late payments in the last 12-18 months. After that, they become less important.
After a foreclosure your score is typically lowered by 250 to 300 points, or even more. This often stays on your credit score for over 3 years.
Will I owe my lender any money for the shortfall?
Few lenders ask for a promissory note on a short sale. In the rare case they do ask for one, then they usually request the borrower repay them a percentage of their loss. As an example, a property we short sold, the bank lost over $120,000. They settled with the seller for $25,000 to be repaid over 15 years with zero interest. The seller’s monthly payment was only $138.89.
Many lenders take 12-18 months to foreclose upon a property and resell it. This dramatically increases the loss and makes any deficiency judgment potentially bigger.
Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at email@example.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (312) 953-6725.
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Remember to visit my short sale blog frequently for great tips and information on Chicago short sales www.Chicago-ShortSaleBlog.com
Thinking about a loan modification? Our Chicago Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.
Looking for properties in Chicago? Visit my website www.BetterLivingRealty.com
Thanks for reading this, Phil Buoscio.
Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..
Phone: (312) 953-6725. firstname.lastname@example.org.
Phil Buoscio, is a broker with Better Living Realty he leads the sales team “Phil Buoscio Team” and specializes in short sales in Chicago Illinois. Chicago Loan Modification Help can be referred to you. We don’t do loan modifications ourselves but we work with those who do.
We know Chicago Short Sales. I am a Chicago Short Sale Realtor. Chicagoland Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor. We do business in Pilsen. McKinley Park. Bridgeport. Wicker Park. West Town. Ukranian Village. Lincoln Park. Near North. River North. East Village. Logan Square. Uptown. Edison Park. Portage Park. Hermosa. Lincoln Park, South Loop, West Loop. Bronzeville. Hyde Park. Kenwood. Oak Park. Brookfield. Cicero. Berwyn. Evanston. LaGrange. LaGrange Park. Riverside. We sell condos, single family homes, lots, land, multi units, two flats, three flats, etc.
Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Buoscio’s personal views and do not reflect the views of Better Living Realty – Buoscio Brokerage, Inc.. This information on how to use a short sale to stop foreclosure in Chicago is provided as a courtesy to our viewers to help them make informed decisions.