Making Short Sales the Tim Mai Way
Simply put, a short sale occurs in a situation when a home owner's debt on the property is greater than the amount for which the property can be sold. This means the lenders are willing to accept less than the total amount due. Here's an example: Assume a homeowner has an unpaid loan balance of $120,000, but the property will only sell for $100,000. The lender accepts that $100,000 as full payment, which is obviously "short" of the full $120,000 payment.
Since lenders aren't in business to lose money, you can imagine that they're reluctant to do short sales and will often only do them as a last resort. It can make more financial sense for them to go through with a foreclosure.
Since lenders aren't in business to lose money, you can imagine that they're reluctant to do short sales and will often only do them as a last resort. It can make more financial sense for them to go through with a foreclosure.
Why Is a Short Sale More Complicated?
A short sale is a complicated process due to the fact that so many factors are involved: e.g., the loan mitigation policies of the lender and third-party investors; the financial condition of the same; financial condition of the borrower; the property's as-is value; the cost to "repair" the property to put it into saleable condition and market it, etc. In addition, approval for short sale must come from the investor who actually owns the loan. Moreover, if the lender is a government-sponsored institution like Fannie Mae or Freddie Mac, approval can take a long time, given the nature of federal-type bureaucracies. Do you like this lens? Keep yourself updated!
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