What is a Short Sale? Considering a Short Sale on Your Orlando Home?
The easiest way to explain a short sale is to describe what happens when a short sale occurs. A short sale takes place anytime a property is sold for less than what is owed on the mortgage and the lenders who own the underlying mortgages accept less than full payoff as a settlement. This has become common in today’s real estate market.
This allows the property to transfer to the buyer even though the lenders did not receive the full amount that they were owed.
Short sales usually take place during the foreclosure process when a buyer is trying to buy a property and the purchase price will not cover the payoff of the mortgages in full. Most often these properties are bought and sold after the foreclosure process has started but before the process is completed through a sheriff’s or trustee’s auction sale. This stage is called the pre-foreclosure stage.
Lenders and mortgage companies have loss mitigation departments whose responsibility is to deal with properties in foreclosure. The main objective of these departments is to find ways to resolve properties in default other than just foreclosing. In other words they’re responsible for mitigating the bank’s losses and keeping them to a minimum. Those options include short sales, deed in lieu, loan modifications and forbearance agreements all of which will be explored in this course.
Foreclosing on a property is a problem for everyone: the lender, the homeowner and the community. Lenders and investors who own mortgages on houses in foreclosure do not want to foreclose and repossess the property. They would prefer the homeowner make the mortgage payments. Mortgage companies profit greatly by lending money and receiving interest payments in return. Many institutional investors also
invest in mortgages to receive the interest payments in return.
Here’s one myth about the companies who service loans. About 80 percent of the mortgages that service companies like Countrywide, Wells Fargo, Option One, Washington Mutual and Homecomings work are owned by some other investor. Those mortgages are not owned by the service company who sends out the mortgage payment coupons and collect the mortgage payments.
Rather, the mortgages are owned by some other “big hitter” like Fannie Mae, Freddie Mac, FHA, VA, a hedge fund or pension fund. The servicer just collects the payments, calculates the numbers and answers customer calls.
Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit www.JerrySellsOrlando.com for your real estate needs. Please give me a call if you have questions about the Orlando and Central Florida real estate market.
P.S. If you are listing your home as a short sale in Orange County Florida and Orlando, Windermere, Winter Garden, or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.
