Frequent Questions & Answers

It is a negotiated settlement or a reduced payoff of the loan associated to the property that is worth less than what is owed. We help the homeowner negotiate a lower payoff so that we can close the transaction and prevent the homeowner from having closing cost fees.

The negotiation process can take anywhere from three to six months. It is important for the homeowner to be patient during this process

First, we collect financial documents from the homeowner. Secondly, we compile this and other information and send it to the bank along with an offer. Thirdly, we request a bank appraisal of the property. After the bank receives the appraisal, they will accept or counter the offer. Finally, if the offer is not accepted, we will market the property aggressively to sell as soon as possible in order to stop foreclosure.

No, we do not charge fees to do a short sale. We will purchase the house or have a retail buyer purchase the home, that is how we make our money.

No. Since the lender is going to take a financial loss, the homeowner will not receive any money from the sale of the property.

The homeowner owns the home until the auction. They can stay in the home, but they should make plans to move out as soon as possible. It is easier to sell the house if it is vacant.

Sometimes, and sometimes not. The borrower is responsible for the mortgage loan. If a short sale is granted or a property goes to foreclosure, the borrower still owes the unpaid balance to the lender. The lender may or may not try to collect the unpaid balance. Our goal is to have the lender waive the balance. In most cases this can be accomplished. In the last year, many lenders have made homeowners sign an unsecured note for a partial settlement. The lender may also grant a full release also known as a total satisfaction. This means that the note is completely satisfied.

The home will go to foreclosure. A short sale is attempted after all options have been exhausted.

If a full release is given, there may or may not be tax consequences. Talk to your tax accountant because everyone’s tax situation is different. The Mortgage Forgiveness Debt Relief Act of 2007 may pertain to your situation. It states that the discharges of indebtedness on a principal residence will not receive a 1099 in connection with a foreclosure or short sale. The act affects the tax years of 2007,2008,2009, and 2010.