This current real estate climate is very emotionally difficult for homeowners who are facing financial hardship.  Many homeowners are upside down on their mortgage, and/or their mortgage payment has just adjusted from interest only to a full blown principal and interest payment, making their new payment out of their financial reach.   Unfortunately financial duress can make a homeowner freeze in their tracks.  Homeowners don’t know who to turn to; friends, family,  or the internet.  They don’t know who to trust, where to go to get real and accurate information, or even basic advice when they are faced with potentially losing their home. 

                 Not just a sad situation, but a shame!  Why didn’t they call on me and my expertise after they missed their first mortgage payment to provide guidance and advice?  Was it due to their pride, embarrassment, shame, or the fact they did not think they could afford my services? Was their concern about confidentiality?   Anything they would have divulged to me would have been held in the strictest of confidence.  Here I am, just around the corner, Kyle Davis, their neighborhood Realtor.  It puts my stomach in knots as I know there was a very strong chance I could have saved them from foreclosure, by listing their home as a “Short Sale”.  One simple telephone call could have saved them from ruining their lives, one call.  What a shame!

Foreclosure vs. Short Sale Facts

Foreclosure

Stays on credit for at least 7 years, max impact

Must disclose on all credit applications for life

Has current and future job impact

Must repay loan shortage, many end up Bankruptcy.

Increased Auto and Life Insurance Premiums

Future housing options are extremely limited

Creates major emotional damage to homeowner

Short Sale

Stays on credit for 2 years, min impact

Can purchase new home in one year with FHA

Bank usually forgives debt balance

Don’t have to claim shortage as income with primary residence

Bank pays Realtor Commission, closing costs, etc…

Landlords willing to give you a second chance

Minor emotional damage to homeowner

                 So again, I ask myself, why did they not call me?  Did they not know these facts? It is easy to see that the “Short Sale” route is much less painful, both short term and long term.  Contrary to popular Government beliefs, banks are not giving loan modifications.  Millions of homeowners in the United States have applied, but less than 120,000 have been approved.  This is the entire United States, not one state.  Banks would much rather assist in a “Short Sale” and wash their hands of the toxic asset than perform a loan modification. 

                 Many Realtors, including myself have gone through extensive training in order to assist homeowners in this situation and in many cases, avoid foreclosure.  This training is called CDPE, Certified Distressed Property Expert.  This certification has provided us with the right questions and tools to qualify the homeowner for a potential “Short Sale”, all done BEFORE the bank forecloses.    The ingredients a homeowner must have in order to qualify for a “Short Sale” are:  experiencing financial distress with loan balances that are more than the property value.  Common types of distress include:  job loss, divorce, pay cut, mortgage adjustment/increase, real estate tax increase, job transfer and a few others.  So please, if you know of someone who is facing foreclosure, ask them to call me immediately so we can explore all of their options together.  Not tomorrow, or the next day as by then, it might be too late to help.  They can email me at Kyle@KyleDavisSells or call me on my cell phone at 703-801-8460.

                If you find yourself in a position where you may lose your home due to a financial hardship, call upon a Real Estate professional immediately.  Don’t lose your home to foreclosure.