A Short Sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed to the bank or mortgage lender. The bank or mortgage lender typically agrees to discount a loan balance because of an economic or financial hardship on the part of the property owner/debtor. When the property owner/debtor sells the mortgaged property as a Short Sale, the entire proceeds of the sale are turned over to the lender, sometimes (but not always) in full satisfaction of the debt. Lenders will allow a Short Sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs, legal fees and other costs and expenses that are associated with a foreclosure. A Short Sale is typically faster and less expensive to you than a foreclosure.

• Loan Modification: This option allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments. If you know that you can pay out your mortgage if the interest rate is reduced, and you want to stay in your home, then pursuing a loan modification is your best option. Beware, however, that if you modify your loan to a monthly amount which you cannot afford to pay, your property will eventually be foreclosed.
• Deed-In-Lieu: To avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt. This process doesn't allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure
• Foreclosure: This is the legal process in which your bank seizes your real estate property if you fail to keep up your payments. In  Florida, foreclosure involves a court proceeding (Judicial Foreclosure).

According to www.makinghomeaffordable.gov, a website operated in partnership with the U.S. Department of Housing and Urban Development, in order to qualify for a Loan Modification, you must meet ALL of the following criteria:

• The property must be your primary residence.
• The amount you owe on your first mortgage must be equal to or less than $729,750.
• You must be experiencing trouble paying your mortgage. For example, have experienced a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have suffered a hardship that has increased your expenses (like medical bills.)
• Your mortgage must have originated before January 1, 2009.
• Your payment on the first mortgage (including principal, interest, taxes, insurance and homeowner's association fees) must be more than 31% of your current gross income.

No. Banks will not entertain both negotiations at the same time as it adds to their already heavy workload.

We facilitate Short Sale negotiations for properties where:

• The total debt is over $175,000.
• There are no more than 2 mortgages on the property.
• The Foreclosure Final Summary Judgment Hearing date is more than 45 days away from the time you sign-up with London Realty Corp..

From the experience of property owners who work with us, foreclosures usually show up as “FORECLOSURE” and can stay on a credit report for 7 years. However, a Short Sale is commonly listed as “SETTLED DEBT”, which is typically much less harmful to your credit. Also, the foreclosure could show up if you apply for a new loan and have your credit report run. It is also a common disclosure that many employers require on job applications.

With regards to your credit score, it may drop as little as 75 to 200 points after a Short Sale. Conversely, after a foreclosure, your score may drop as much as 200 to 280 points. * 

The Short Sale process typically takes between 4 and 9 months, during which London Realty Corp.will be engaged in a long and time consuming negotiation with your lender. During the process your lender might reject several of our offers. We understand that this can be a frustrating process for our clients. While we will contact you during this time to update you as to various aspects of the process, our most important advice to you is to be patient.  

 Q-What may be the possible outcomes of a Short Sale?

• Debt Forgiveness: Your lender may forgive your debt and the process will be complete. In this event, you will receive a final release from your lender.
• Soft Note Request: Your lender may issue a full release in exchange for a soft note payable over 5 to 30 years equal to a small percentage (10% to 30%) of the deficiency.
• Deficiency Judgment: Your lender may reserve the right to pursue a deficiency judgment against you for the deficiency. This option requires your lender to litigate, a process which will take time and cost them money.

After a lender forecloses on a property, it keeps the proceeds to pay off the borrower’s debt, legal fees and interest plus other costs related to the foreclosure. If the sale of the property does not bring enough funds to pay the borrowers debt, the lender can file a claim for a deficiency judgment against the borrower. A deficiency judgment is separate from the foreclosure judgment and results in the court awarding the lender a monetary judgment for which the borrower will be personally responsible. The lender has more than 10 years to collect on the deficiency judgment.

Foreclosure and the related deficiencies are complicated issues. Please do not use any one piece of information alone, including this answer, as the basis of a decision for dealing with foreclosure or deficiency issues. This answer is intended to be used for information purposes only.

If London Realty Corp. is not able to either successfully negotiate a short sale with your lender or find a buyer for the property once the Short Sale is approved, you will be in the same position you were before the negotiation began and most likely either a Deed-in-Lieu or a Foreclosure will follow.

London Realty Corp.  ( as well as our attorney based Short Sale Negotiating Team) will not collect any fees from you and will only receive compensation upon the final sale of your property. Our compensation is contingent on a successful closing  and will be paid by the Lender.

We encourage you not to engage in negotiations with your lender once you have started the process with us, as this results in unnecessary confusion which only serves to slow down the process. If your lender calls you regarding the Short Sale negotiation, please request that they communicate directly with our Short Sale Negotiating Team.

If you have been served with a foreclosure lawsuit, your lender will likely move forward with the foreclosure during the Short Sale negotiation. This is a standard practice by lenders and is done to protect the lender in case the Short Sale negotiation fails. In most cases, however, lenders will not seek a final summary judgment on your property until the Short Sale process is complete. Note that in most instances banks would rather sell a property at a loss via a Short Sale than to litigate, foreclose and own the property.

No. The specialists at London Realty Corp.are not attorneys and London Realty Corp.is not a law firm – as a consequence we cannot provide legal advice to you in regard to your lawsuit.  Our Short Sale Negotiating Team is attorney based and they may provide some legal assistance.

 
If you have a court hearing relating to the foreclosure of your property, and you decide not to hire counsel, London Realty Corp.will provide you with the “Residential Sale and Purchase Contract” to prove to the court that you are negotiating the sale of your property and that you have an interested buyer at the right price. In the experience of some of our clients, this often results in a delay of the foreclosure proceedings.  This is not intended as legal advice; if you are seeking legal advice please consult with an attorney.

No. You, the property owner, are the ONLY one who can communicate with your lender regarding the foreclosure of your property. We can only communicate with your lender regarding the Short Sale process. We do, however, need to be kept aware of the status of any pending foreclosure proceeding. Therefore, it is important that you promptly provide copies of any notices, letters, correspondence, phone conversations, or any communications from or with the lender to  our Short Sale Negotiating Team, as we cannot effectively assist you if we are not made aware of status changes in the foreclosure process for this property. You will be instructed where to forward all such correspondence.

No! London Realty Corp. or our Short Sale Negotiating Team   will send your lender a Cease and Desist Letter requesting that they do not bother you with collection calls while we are negotiating on your behalf. If your lender continues making collections calls to you, it probably means that the Cease and Desist Letter has not been delivered to the right department. As part of this transaction, you will receive copies of the letter.  

 Q-Should I continue paying my Association fees?

Yes. Often in pre-foreclosure cases property owners stop paying their association fees. This makes it possible for the homeowners or condominium association to foreclose on the property and cause you to lose title to the property. In the event that this occurs, we will be  unable to help you. Property owners must remain current on all payments to the association throughout this process.

If you have tenants in your property, we suggest that you notify them that you are negotiating a Short Sale with your lender. Your tenants need to be made aware of the fact that the property may be sold and that they will need to be ready to vacate the property once the Short Sale is approved. Please provide London Realty Corp. a copy of the lease agreement with your tenant.

Broker Price Opinion, or BPO, is a method that banks and real estate brokers use to estimate the probable selling price of a property. As part of the process, your lender’s agent will request an opportunity to see the property. Usually the lender will schedule the BPO via London Realty Corp. You must ensure access to the property for the BPO within 24 hours of receiving our notification. If the bank’s appraisal/BPO company contacts you, please direct them to us. Please be advised that it is not uncommon for lenders to perform multiple BPOs per property.

Yes. Your broker/agent will coordinate both the inspection and the final walk-thru for the buyer. In order to successfully close, you must ensure that the property is delivered to the buyer in acceptable condition. Please cooperate by making the property available as scheduled by your broker/agent.

Yes. Once a final buyer for your property is found and there is a scheduled closing, our Short Sale Negotiating Team   will notify you to prepare to vacate the premises. Once you have received our notification to vacate, you will have 15 working days to do so.

Because you have or will sign a Power of Attorney, you will not need to be present at the closing.

Normally when a lender forgives all or a portion of a borrower's debt, the forgiven amount is considered income for the borrower and is liable to be taxed. However, after Congress signed the Mortgage Forgiveness Debt Relief Act of 2007, it removed such tax liability and allowed the borrower and lender to work to find a common solution that is beneficial to both parties. This protection is limited to your primary residence.

Regarding 1099s, if you can show that you were insolvent (insolvency merely means that your total debts were more than the equity you had in your home and personal property) during the time the Short Sale took place, the taxes that are part of the 1099C can be avoided as per IRS tax code section 121 form 982. However, we strongly encourage you to seek advice from a tax accountant who can best advise you regarding these matters.

When you are ready to proceed with London Realty Corp., we will provide you with a list of information and documents you need to provide to us. Our list is fairly comprehensive, and based on our experience processing short sales it is not uncommon for lenders to request additional information once the Short Sale process has commenced. It is important that you furnish requested information within 48 hours of receiving notification from us. If we do not receive this information in a timely manner, then it will be impossible to effectively negotiate the Short Sale.