Short Sale FAQs

If You Are Looking To Buy
or Short Sale Your Home,
Let Our Experienced
Short Sale Experts
Help You.
Our Professional
Short Sale Services Are
100% FREE To Our Clients!

Frequently Asked Questions

What Is A Short Sale?

Short sale is the sale of a property for an amount less than is owed on the existing mortgage(s) or other forms of securitization tied to that property. For example if a home owner has a first mortgage and a second mortgage together totaling $675,000 as a payoff price and the home is worth only $550,000 there is no possibility the home owner can sell or refinance without paying the difference from some other source. In this market this is normally impossible so the home owner demonstrates to the lender their inability to satisfy the debt and presents an offer from a buyer at the lower price. The lender, after due diligence, may accept a well formed offer and settle short.

Why My Bank Gets Financial Benefits by Forgiving Me The Short?

Simple. It is Expensive for the lender to foreclosure a home in Hawaii. Some of the lender’s costs could include Legal fees, Insurance, Taxes, Eviction cost, Selling cost, etc. On average, it costs as high as $50,000 per foreclosed property. Their business is Loaning Not, Owning!

Why Should I Consider a Short Sale?

The Short Sale happens in Pre-foreclosure stage. If the short sale is successful, the seller escapes foreclosure and the corresponding hit to their credit report. They only sustain smaller hit on their credit report for any missed payments and the short sale.

Why Short Sale Doesn't Cost Me Anything?

Yes, short sale does Not cost anything to homeowners. Your bank will pay all the fees of the real estate sales including closing costs and real estate commissions only when we complete your short sale successfully.

What is HAFA Short Sale Program?

The actual phrase HAFA is short for Home Affordable Foreclosure Alternatives and is the short sale arm of President Obama’s Making Home Affordable home loan modification plan. This plan assists homeowners who can’t find the money for their first mortgage loan, want to stop foreclosure. One of the requirements of a HAFA short sale is that the borrower be released from any future obligation on the first mortgage. This is important because it means that the lender can never turn around and demand that the borrower pay the difference in sale price to loan amount. They are not allowed to accept any cash contribution from the homeowner, or any promissory note or deficiency judgment.

Whats is Deed-In-Lieu?

Generally, if the borrower makes a good faith effort to short sell the property and is ultimately not successful, a servicer may consider a deed-in-lieu of foreclosure. With a deed-in-lieu, the borrower voluntarily transfers ownership of the property to the servicer – provided the title is free and clear of mortgages, liens, unpaid HOA fees or other encumbrances.

The HAFA Program streamlines both of these options to make it easier for a homeowner to work with their servicer. Under the program, a homeowner can receive up to $3,000 in assistance to help with relocation costs.

You must be advised however that mortgage servicers and investors write their own guidelines under the Federal requirements to determine how to implement the program. For more information about your options, you should contact your mortgage servicer. If you have questions about the program, or want guidance about how these options may impact your personal situation, you may wish to speak to a HUD-approved housing counselor for free.

We have a 2nd mortgage. Am I still Qualified?

Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender. Most short sales do involve 1st and 2nd lien holders.

Can I Short Sale My Home For Free With No Deficiency Judgments?

The availability of a deficiency judgment depends on whether you have a recourse or nonrecourse loan, which is largely a matter of state law. In some jurisdictions, first mortgages are non-recourse loans, but second and subsequent ones are recourse loans.

States that follow the title theory of mortgages typically allow non-judicial foreclosure procedures, which are fast, but do not allow deficiency judgments. States that follow the lien theory of mortgages require judiciary foreclosure procedures, but allow deficiency judgments against the debtor.