mortgageloanus's blog

The only way to hold a short sale on your property is if both the primary lender and the HELOC lender or second lien holder agree. In addition to the money recouped by the sale you may be required to pay a certain amount to one or both lenders in order for the account to be considered closed. If you have money it is likely that your lender(s) will require you to make a contribution. Some lenders will report the account as "paid in full" to the credit bureau if your Realtor is able to negotiate that. This is something that you should get in writing, however, as part of your short sale approval letter.Homeowners may feel that it is not worth it to short sale a home if they have to contribute funds to satisfy the lender. If you stop and think about it though it is not the lenders fault that your home decreased in value. In anti-deficiency states, like Arizona, homeowners may opt to allow foreclosure rather than possibly have to contribute funds to a short sale. Keep in mind that
a HELOC does not meet the anti-deficiency requirements, however.My view is that if you have the money you should make the contribution to the sale. Discuss your finances with your Realtor prior to listing your home in a short sale situation, because it is likely that your HELOC lender will want a contribution from you. Short sales are a lot of work for everyone involved, including the Seller, but it may very well be worth your efforts. At the end of the day you know what you can afford and what is right.Having your credit report reflect that the account was "paid in full" versus "settled for less than amount owed" will positively affect your credit rating. It is my opinion that if you have a home equity loan or home equity line of credit in Arizona a short sale is a viable option for you. As long as your approval letter states that your lender will not seek the deficiency then it is worth making the contribution to satisfy this second lien-holder. In Arizona, the HELOC lend
er has the right to seek the deficiency after foreclosure. Therefore, by negotiating a settlement in the sale you don't have to worry about the HELOC lender pursuing you later on.Keep in mind that not all short sales are approved by the lender. It is a case by case basis. Review the Short Sale Advisory prior to hiring a Realtor or anyone else to help you avoid foreclosure. If you are already in the process of selling your home short of what you owe then make sure you have a real estate attorney review your short sale approval letter prior to closing. This may save you a law suit in the future.To recap, a selling short of what you owe when you have a mortgage plus a HELOC allows you to settle the debt on the HELOC. If you allow foreclosure, in Arizona, the HELOC lender can sue you for the deficiency. Seek legal counsel regarding your specific situation and contact an experienced short sale agent, like myself, in your area. This article is not intended as legal advice. Contact
a local real estate attorney regarding your specific situation.Evette Cecena provides her friends, family and community with real estate related information to protect them from predatory lenders and agents. There are too many people today simply looking to make a buck. Evette takes her position as an Arizona Realtor seriously. Her fiduciary duties to her clients are not forsaken. Evette earned her Bachelor's in Marketing Management at Western Governor's University (2010) and attended the Professional Institute of Real Estate (2004). If you enjoyed this article then follow Evette's column at http://theQueenofHUD.com The Queen of HUD is your Short Sale and Foreclosure Resource (SFR) and friend in http://www.chandlerealestate.com/

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