Lawrence Short Sale Closed

I recently closed on a Lawrence Short Sale located at 3 Woodland Drive, Unit 6 in the Tower Hill section of Lawrence. The property closed for $100,000. It was a townhouse of just over 1400 square feet in good shape. It offered a lot for the money.

A short sale was successfully negotiated on two loans. A first lien from Chase Bank and a second lien from Webster Bank. Both lien holders wrote the debt of as settled, allowing the seller to move on with no further recourse from either bank.

On top of the seller being released from the debt in the Lawrence Short Sale the seller also received $3,000 incentive as the first loan was owned by Fannie Mae (FNMA). If you have a Fannie Mae backed loan the requirement is that the debt from both lien holders are settled in the short sale as well as the seller may receive a small incentive to do the short sale.

If you have missed a mortgage payment or have been considering a short sale, give me a call at 978-360-0422. I will meet with you and discuss all your options to foreclosure as well as go over the short sale process. I can help you find a solution that is right for you. While short sales may not always be the easiest transaction, there are many benefits to doing a short sale over losing your house to foreclosure. Like this Lawrence short sale I just completed, the seller was able to walk away with no worry following her about the bank coming after the deficiency balance.

What did this Lawrence Short Sale have to say?

“Kevin was a great asset through our short-sale process. He is knowledgeable about the area, he let us know what to expect throughout the process, and he has a great team set up to take the transaction from listing to closing. Beyond his expertise, Kevin is responsive and wonderfully patient, always available to answer questions. I can recommend Kevin’s services with complete confidence.”

I would like more information about avoiding foreclosure or about short sales

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The Massachusetts Foreclosure Prevention Law

I just posted a summary of the Massachusetts Foreclosure Prevention Law on my blog dealing specifically with short sales. Hopefully this new law will slow down the foreclosure process as well as make the banks take a closer look at options to foreclosure.

Excerpt reprinted from MassachusettsShortSales.info

Governor Deval Patrick signed into law the new Foreclosure Prevention Law in August of this year and went into effect on November 1st. The Foreclosure Prevention Law is described as “An Act Preventing Unlawful and Unnecessary Foreclosures.”

Mortgage Assignments are Required to be Recorded

The new law states the foreclosure process may not begin unless the entire chain of mortgage assignments from the original mortgagee to the foreclosing party is recorded. Read more….

Stopping a Foreclosure Auction with a Short Sale

Visit my site Massachusetts Short Sales . info to read the article I wrote on how Stopping a Foreclosure Auction with a Short Sale.

Short sales have many benefits to home owners. One such benefit is if we are currently negotiating a short sale offer we can typically stop any upcoming foreclosure auctions. You have options to foreclosure. Almost all of your options will benefit you more than a foreclosure sale. Take the time to learn your options to foreclosure.

Bankruptcy and how it ties in with Short Sales and Foreclosures

I must start out by first saying that I am not a bankruptcy attorney and by no means an expert. I am writing this post from the standpoint of being a Massachusetts Short Sale Realtor and what I have experienced. If you are in a pre-foreclosure situation and you are considering a bankruptcy to save your home you should consult with a bankruptcy attorney.

When should I consider a Bankruptcy prior to a Short Sale or Foreclosure?

A bankruptcy should be considered, if the restructuring of your debt will allow you to afford to stay in your home. If you have very little debt above and beyond your mortgage, bankruptcy may not be an option. Basically a reduction of your debt will allow you to afford your mortgage. There are certain circumstances where a second mortgage may be completely removed in what is know as mortgage stripdown.
If you know you will have to do a bankruptcy regardless of any outcome from a short sale or foreclosure a bankcruptcy should be considered right away. Knowing that regardless of any outcome, you will have to do a bankruptcy there are some benefits to a bankruptcy prior to a short sale or foreclosure. One thing the bankruptcy may do is prevent you from owing any deficiency balance on a short sale or foreclosure if one should come about.
I have worked with attorneys who will use a bankruptcy to stop a foreclosure auction on the day of the auction. Basically, the attorney filed an emergency stay to delay the auction long enough for the seller to get the home sold. In these cases the homeowner wanted to avoid a bankruptcy and the filing would later be withdrawn so there would be no bankruptcy on the homeowners credit score.

When should Bankruptcy not be considered prior to a Short Sale or Foreclosure?

Bankruptcy should not be considered if the bankruptcy will not allow you to keep your home and there are no other benefits to you. First of all you should always try to avoid foreclosure, you have several options to do so. On of the more popular options is a short sale. Many times, in a short sale, we negotiate the settlement of the deb,t preventing the lien holder from pursuing a deficiency judgement for any deficiency balances. Sometimes a lien holder may retain the right to go after a deficiency judgement in a short sale. When they do, many times they do not pursue the deficiency judgement as the banks feel they are chasing money they probably will not get.

Many homeowners are trying to avoid a bankruptcy and a foreclosure on their credit. A short sale is one avenue to prevent either of showing up on your credit report. After a short sale, if the bank then does decide to pursue a deficiency judgement against you, is the time to consider a bankruptcy.

Some things to know about Bankruptcy

Bankruptcy is not a panacea to all your financial problems. There are ramifications to bankruptcy and it should not be taken lightly.
A bankruptcy in many cases will not save your home. Many times I talk to homeowners a year before doing a short sale for them. They have gone into bankruptcy thinking it will save their home, only to find that they were back to facing an imminent foreclosure. Ask questions and make sure the bankruptcy is right for your situation.
While in a bankruptcy, a lien holder(bank) can file for a stay of hardship and a month or two later your home is back in the foreclosure process.
If you manage to keep your home through the bankruptcy process (unless you pull off a mortgage stripdown) you will still owe all arrearages and penalties occurred prior to the bankruptcy. Typically you have 5 years to get caught up.

One last consideration

Many times I see home owners drive themselves crazy and spend good money after bad in trying to save their home. If you owe $400,000 on your home and it is now worth $260,000, is it worth paying on an asset that is no longer worth anywhere near what you paid for it? Remember, I have never seen a bank readjust the house price. You will always owe the money you borrowed against your home. It would take 15+ years at a modest appreciation to even get close to what you owed on that home. Ask yourself, is it worth it?

Disclaimer- Again, by no means am I an attorney or an expert on bankruptcy. This post should not be considered legal advice and if you are in need of legal advice please consult an attorney. Many bankruptcy attorneys offer a free consultation to go over your situation and at times bankruptcy can and should be part of your pre foreclosure strategy.

I have provided this post, because I know if you are concerned about losing your home, finances may be difficult and you are looking for information on the internet and I wanted to share what I have seen with bankruptcy that has or has not worked for upside down homeowners to give you a starting point.

If you have you are facing foreclosure or missing mortgage payments, feel free to call. As a Massachusetts Short Sale Realtor I have helped guide many home owners through their options. Call 978-360-0422

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What is a Short Sale?

As a real estate agent that handles many short sales in Massachusetts, I run into many consumers that don’t really know what a short sale is and entails.

Definition of a Short Sale

A short sale in real estate is when a homeowner cannot sell a home in an open market for the amount owed on the home. Generally, there is a financial hardship that prevents homeowner from continuing to pay their mortgage, though we are hearing more and more about strategic short sales in the news. Once an underwater seller lists their home for sale and secures an offer then a “short payoff” must be negotiated with the lien holder(s).

I say lien holders because when dealing with a short sale property and financially distressed sellers many times we are dealing with more than just a bank. Many times we have to deal with entities such as condo associations, mortgage insurance companies, and municipalities that may all have liens on the property.

Think of a short sale as a pre-foreclosure. The original owner still owns and hopefully maintains the home. All decisions regarding the home are made by the seller and the bank only agrees to release the home for sale to a buyer. A short sale is usually the last effort before a foreclosure. A home that has been taken in foreclosure is owned by the bank.

What do buyers need to know about short sales?

A short sale is not a license to steal property, but in many cases, you will receive a discount on the home of 3% to upwards of 10%.

You are negotiating your terms with the homeowner and not the bank. (though the bank can sometimes drive the terms presented by the seller). This is where a lot of confusion comes from with potential buyers.

A short sale does require time to go through the process. If you do not have three to four months to wait for a final short sale approval, than a short sale may not be right for you. Just because you have an offer accepted by a seller does not necessarily mean the bank will approve the short sale. Though if the listing agent has any experience with short sales the chances are extremely high that your offer will be approved.

Finally, a home sold in a short sale creates fewer issues to you the home buyer than a foreclosure. Foreclosures are a complex legal process and if not done properly can wreak havoc on a future sale for you. Also, in a foreclosure, the bank has never seen or occupied the home or been made aware of other title issues and therefore, any issues affecting the property are usually unknown.

What do sellers need to know about short sales?

If you are a homeowner that has missed a mortgage payment and can’t catch up or have to sell a home but are underwater on the mortgage then a short sale can be one of your more viable options. Understand that you have options to foreclosure.

In general, you want to avoid foreclosure and exercise any number of options you may have to foreclosure. Briefly the two major reasons to avoid foreclosure are:

Avoid a foreclosure on your credit report.
Have some control over the outcome of your home and financial future. Many times in a short sale a future deficiency judgment can be eliminated or reduced.

I hope this article clarifies some key point of a short sale. If you are a buyer looking at short sales or a seller looking to sell your home short it is important to be represented by a real estate agent that fully understands short sales. Short sales are complex and not every agent is well versed in the process.

more on Massachusetts Short Sales

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If you are a Massachusetts homeowner that has missed mortgage payments, or facing foreclosure or a home buyer interested in buying a foreclosure or short sale call Kevin at 978-360-0422. I will explain your possible options to foreclosure. Every situation is different and you have about five options to consider. If a short sale is your best option my short sale team will work to complete a successful short sale on your home. Combined we have successfully closed 100’s of Massachusetts Short Sales. My closing ratio is almost 10

Other Short Sale Information:

Free eBook- Should I Short Sale My Home
[intlink id=”258″ type=”post”]The Strategic Short Sale[/intlink]
[intlink id=”551″ type=”post”]Chasing the Loan Modification[/intlink]
[intlink id=”365″ type=”post”]What is a Short Sale?[/intlink]
[intlink id=”533″ type=”post”]The Short Sale and the Investor Offer[/intlink]
[intlink id=”328″ type=”post”]Massachusetts Short Sale vs Foreclosure[/intlink]

Short Sale Realtor Services in northeast Massachusetts, the Merrimack Valley and surrounding area including the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury.

Massachusetts Short Sale vs. Foreclosure

I have written past articles about why you should consider a short sale vs. foreclosure. Lately, I have been on a few short sale appointments where the home sellers feel if they are going to lose their home anyways, why bother with a short sale and just let the bank foreclosure and avoid the hassle.

Short Sale vs. Foreclosure… Why is a short sale better?

I thought it was worth reiterating why a short sale is usually more beneficial to a homeowner than a foreclosure. There are 2 reasons that a short sale is better than a foreclosure:

Credit Retention- A short sale will typically impact your credit score less than a foreclosure. There are definitely many factors that can effect how your score will be impacted in a short sale…. unfortunately many times there are other credit issues other than just the mortgage. In a short sale, the debt is usually reported as settled. A foreclosure is one of the worst credit marks you can have. Even if you manage to bring your score back up a reported foreclosure will prevent certain types of credit being available to you until it is removed (usually seven years)
Controlling the deficiency judgment- Whether you do a short sale of a foreclosure, you may have to deal with a deficiency judgment. In the state of Massachusetts a bank has up to two year to file for the deficiency and up to 20 years to collect. They can garnish wages, attach future assets and so on…. In a short sale, many times the right for the bank to pursue a deficiency judgment negotiated right off the table. You do not have that option with a foreclosure. Even if in the short sale the bank retains the right for a deficiency judgment it could be for less than what it would be in a foreclosure. Don’t forget you have to pay all the costs associated with the bank trying to collect the debt.
Avoiding the stigma to foreclosure– A foreclosure notice and auction results will be reported in your local newspaper. It will be public to anyone who picks up the local newspaper. While a short sale is disclosed it is not quite as public as losing your house to foreclosure.

Don’t give up so easily, what you decide today can impact you for many years to come.

When deciding whether a short sale vs foreclosure is right for you, consult with an a short sale REALTOR, a real estate attorney and/or your accountant. Each professionally may have a different perspective that will be important to your situation.

Should I Short Sale My Home

Avoid Foreclosure- Know your options including a short sale

Why a Short Sale?

Free list of non-profits for homeowners facing foreclosure in Massachusetts

If you have missed mortgage payments and do not know what your step is call me. I can explain the different options to foreclosure you and help you decide what option is best for you. Of course the call is confidential and of absolutely no obligation. Call Kevin at 978-360-0422

See what a recent client had to say!!

“Thank you so much for helping us sell our home during such trying economic times. Your expertise in short sales and knowledge of the real estate market was instrumental in getting three offers on our home the first day it hit the market! The offer accepted was more than the asking price! You did an outstanding job in going the extra mile when any issue arose.

We can’t thank you enough for giving us your objective opinion numerous times and guiding us through contract negotiations and the closing process. You truly have the client’s best interest at heart from the moment you meet them until the job is done! We HIGHLY recommend you to anyone looking for the “BEST” in the business to sell their home!

Thank you again and we look forward to getting together with you soon!”

Dracut Homeowner

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The Strategic Short Sale

With almost 23% of the homes in a negative equity position nationwide, it leaves many homeowners that are not in a financial hardship wondering why they are paying on a home that is worth significantly less money than what is owed on it. Some homeowners are deciding to walk away from their homes.

When a homeowner makes a decision to stop paying their mortgage without a financial hardship and let the bank foreclose or do a strategic short sale, this is called a strategic default.

Traditionally in the past, most banks would not consider a short sale with out a financial hardship. Some lawyers are arguing that anyone who has negative equity of 30% or more on their home are in a financial hardship. This really leaves us thinking that a financial hardship can be very subjective. Furthermore when banks start walking away from foreclosure or foreclosed properties themselves, it makes homeowners wonder why they are way overpaying for a house that no longer has the equity in it. Following are articles about banks canceling foreclosures or walking away from homes they own.

NY Times article on banks canceling foreclosures

Chicago Tribune article on bank walk-aways

When you read this articles as an underwater homeowner, it makes you wonder why your not walking away. Let’s face it the banks are profit driven and if they are making a financial decision to just walk away, why wouldn’t homeowners. The question is why are the banks willing to not foreclose or walk away? The cost to foreclose and maintain the property or if the bank already owns the property the cost of maintaining it is greater than what the bank can sell it for.

So will the banks consider a strategic short sale? Some will and some won’t. If a bank thinks you will walk away from a home and you will let them foreclose, they may consider a strategic short sale a better option. In a foreclosure the banks will easily spend an additional $35,000 to $50,000 dollars in legal costs to foreclose and the cost of carrying a home.

It is a weighty decision for a homeowner to walk away from a home. Massachusetts as well as many other states is a “recourse” state. Meaning that the bank can take action to collect the difference that is owed between what the house is sold for and what is actually owed on the house. There are credit reporting ramifications, there can be tax ramifications as well as overall financial ramifications. It is a decision that should not be taken lightly. At the end of the day, regardless of the outcome you may decide a strategic short sale or a foreclosure may be right for you.

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This post was provided by Kevin Vitali of EXIT Group One Real Estate In Tewksbury MA. You can contact Kevin by email at kevin@kevinvitali.com or call 978-360-0422.

I pride myself in the quality of my work while helpingbuyers and sellers make dreams come true.

Real Estate Services in the northeast Massachusetts, around the Merrimack Valley, Southern New Hampshire including the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury