Loss Mitigation: The Short Sale

"I fell in to a burnin' ring of fire" rings in my head as I think about Short Sales. A Short sale is different from a foreclosure. Basically, a Short Sale, the Homeowner is still Selling their home on the open market, but the existing loan company must agree to forgive some of the debt owed against the home. And, the home has to SELL in order to get out from under it. Yes, it damages credit, but not as bad as a Foreclosure, where the Homeowner has failed to make the mortgage payments and the bank simply (well, it's not "that simple") takes the home away from the homeowner. In short, A Short Sale has to SELL in order for it to close. In a Foreclosure, the bank takes the home away from the owner and it becomes the property of the bank, sometimes called a Bank REO (Real Estate Owned). The banks have companies that negotiate the sales of these properties. In most cases, the bank will take a loss. These losses are analyzed by the Loss Mitigation Department of the bank. The Loss Mitigation reps determine if they’ll accept the terms of a Short Sale. They can also talk directly with the borrowers in some cases to re-negotiate an existing note. Banks do not want to own real estate. They want the interest. They’re interested in liquidity and ROI. Questions?
Ask Broker Pat Townsley, 415-485-1776, http://www.ptre.net/