I was talking with a real estate broker today about the process of short sales, and why they are so difficult to do, and she told me a rather sad (and she said typical) story. A borrower in Compton had an $800,000 mortgage, and was about to close a short sale for $170,000.
Everything was all set to go, when the lender told the borrower that if she didn't sell, she would get a modification. The borrower in the end did not sign off on the short sale; she never did get the modification, and was foreclosed on 60 days later. Both the borrower and the lender would have been better off had the short sale happened--the borrower's credit history would have taken a smaller hit, while the lender would almost surely recover more money.
Everything was all set to go, when the lender told the borrower that if she didn't sell, she would get a modification. The borrower in the end did not sign off on the short sale; she never did get the modification, and was foreclosed on 60 days later. Both the borrower and the lender would have been better off had the short sale happened--the borrower's credit history would have taken a smaller hit, while the lender would almost surely recover more money.
4 comments:
There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For home owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."
Anna Thomson from Payday Loans @
When making real-estate-secured loans, lenders routinely require borrowers to maintain specified types and amounts of insurance on the property that serves as the lender's collateral.
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