Foreclosure Options

WHO I AM

My name is Cyrus Malhotra, Broker/Owner of Blackstone Realty, LLC. I started helping people who were behind in their mortgages in 1998 when I first received my real estate license. In order to get a better grasp of the legal side of real estate and foreclosure, and to serve my clients better, I went to law school and studied real estate law. I then practiced real estate law for 3 years to get a thorough understanding of the inner workings of banks and foreclosure proceedings and represented homeowners in foreclosure. This has allowed me to gain a much more detailed understanding of the foreclosure process. (this is not an advertisement for legal services.)

I did all this with one purpose in mind – to serve you better.

Unlike most other people who will contact you, I never charge my clients any fees at any time. The only way I get paid is if I sell your house, in which case I negotiate my commissions with your bank. I also ask the bank to pay all closing costs and other fees associated with your sale, so you will not be liable for any costs at closing.

HOW I CAN HELP YOU

I specialize in short sales and am very familiar with the loss mitigation process. I have dealt with several banks and have closed several deals in this market.

There are several alternatives if you find yourself in foreclosure. Before we get started we want to commend you for your bravery in facing the incredible burden of dealing with this. The natural reaction is to ignore the problem hoping it will go away, but it only makes matters worse. Whether your intention is to keep your house or get rid of it, the next few paragraphs will give you a much better understanding of your options in today’s rapidly increasing foreclosure marketplace. Below you will also find some common misunderstandings about the foreclosure process and some things to beware of, along with a detailed view of the short sale process.

Do you want to keep your home?

Blackstone Realty, LLC always gives homeowners in foreclosure any and all information which can assist a homeowner in keeping in their house if that is their desire. These days most financial institutions have become much more lenient towards homeowners in foreclosure. The bailout has had an effect, and your lender will most likely be willing to speak with you about possible options available.

Loan Modification - Depending on the lender, you have the possibility of modifying the terms of your mortgage. As long as you qualify, lenders are lowering rates to as little as 2% and modifying other terms to lower your payment to a manageable level. If you had a 2-,3-,4- or 5-year adjustable mortgage they may be able to help. ***PLEASE NOTE: YOU MUST BE CURRENT ON YOUR MORTGAGE TO QUALIFY FOR A LOAN MODIFICATION. What to do: Either (1) call the bank yourself and speak to a representative in loss mitigation. I have so many homeowners who say, “I called them 6 months ago (or even longer) and they said they could not do anything”. If you have, please understand that banks are adapting more and more every month to financial conditions and they are realizing that it costs much less to negotiate with you than to not receive payments for over 1 year and then foreclose on you. If you still do not feel comfortable speaking with them there are several real estate attorneys who handle foreclosures. Lexis-Nexis has a list of certified attorneys in your area. Pitfalls: The major pitfall your have to be aware of is that only about 20-25% of loan modifications are successful. While this number is low, please realize you still have a chance. We always inform our clients of this statistic up front in order to give you a realistic idea of your chances of success. BEWARE: Many people will claim to be loan modification specialists, however many groups are known as scams. IT IS ILLEGAL FOR LOAN MODIFICATION SPECIALISTS TO COLLECT FEES UP FRONT. Also, chances are your bank will work with you directly. If you are still uncomfortable speaking with bank representatives, speak with an attorney who is knowledgeable about the process.

Loan Write-Down - While not as common as a loan modification, few banks are allowing owners to stay in their homes and actually "writing down" the amount owed to the bank. Typically this is done with higher-end properties which have a significant difference (over $100,000) between the loan balance and the market value of the property. The only bank that we know doing this is Bank of America, and only in limited circumstances; however if your desire is to keep your home, it is always worth a shot to ask your lender if they provide this service.

Litigation – you can hire a real estate attorney and defend the foreclosure lawsuit based on various defenses (i.e. usurious lending practices). The only issue is that since foreclosure defense and the tactics used is a relatively new specialization, the outcome of these defenses will ultimately be tried in court in the future. The merit of these defenses has yet to be applied, and the outcome is uncertain. While this can buy you additional time in your house, there is no guarantee that it will fix your problem permanently. Pitfalls: In most cases you have to pay the attorney monthly, between $200-$500, in most cases for upwards of 1-2 years before your case is tried in court, and there is no guarantee that the legal defenses will have any effect on discharging your mortgage.

Bankruptcy – Bankruptcy is an alternative many homeowners are considering. When a bankruptcy is filed with the court, an "automatic stay" is placed on all assets preventing creditors from coming after those assets (cars, furniture, homes, etc). Furthermore, the damage to your credit from a short-sale is far less than the damage caused by a bankruptcy.While Blackstone Realty, LLC cannot give legal advice, we can recommend that you find a good bankruptcy attorney in your area if you are considering this route. The laws have changed in the past few years, and it is not as easy as it once was. Your attorney will be able to discuss your possible avenues. Pitfalls: Bankruptcy does not mean you get to keep your house without making any payments. The "automatic stay" is only effective so long as the court wants it to be in place. At any time the court can grant your lender's motion for "relief from the automatic stay." Once the court grants that motion the foreclosure against your home can proceed to conclusion. In many cases bankruptcy is merely a "stall tactic", and once the bankruptcy is over your lender will resume the foreclosure process. Also, bankruptcy will have a devastating effect on your credit for many years to come. You must carefully consider this option.

Do you just want to get rid of the house?

There are two options if you do not want to keep your house.

Deed-in-lieu of foreclosure – In this situation the bank accepts the deed to your property. You simply have to request a deed in lieu package. Keep in mind the package takes several weeks to arrive, so make sure to order your short sale package as well. Blackstone Realty, LLC is familiar with the forms and information required and can assist you in making a package on short notice. Pitfalls: In most cases the bank will not consider a deed-in-lieu unless you have had your home on the market and have been unsuccessful in selling it. The bank wants you (more specifically your Realtor) to show that an effort has been made to sell the home, as the bank does not want the additional burden and cost of simply taking every home back and trying to sell it themselves. Simply placing a "for sale" sign on the property does NOT qualify as trying to sell the home, it must be on the MLS, and must be advertised aggressively. Please view our marketing plan to see how we market all our listings. In rare cases when we are unable to sell a home, once the bank sees how aggressively we have been marketing the home they will be much more inclined to accept the deed-in-lieu.

Short-sale – The short-sale of a property has some pitfalls which need to be considered; however, a short-sale is better than a foreclosure for several reasons. Pitfalls: Credit – The borrower’s credit will be adversely affected from the late mortgage payments. It will show as a settlement on your credit report. Benefits: First and foremost, YOU DO NOT HAVE TO PAY ANYTHING TO ANYONE AT ANY TIME. OUR COMMISSION AND ALL CLOSING COSTS WHICH ARE TYPICALLY PAID BY THE SELLER WILL BE PAID BY THE BANK. while a short-sale hurts your credit, a foreclosure is far more devastating. Furthermore, if the lender forecloses on your house, and there is a shortage once the bank sells the home (meaning what the bank sold the home for vs. what you owed on the home), the lender has the right to pursue you for a deficiency judgment for the difference. This is a problem many homeowners who have foreclosures on their records may run into a few years down the road as banks are packaging these deficiency judgments and selling them on the securities market (similar to junk bonds). The debt collectors who are buying these security instruments have several years before coming after the homeowners. Many believe these debt collectors are waiting for the dust to settle before pursuing these deficiency judgments.

With a short-sale, your debt is cancelled at closing. Sometimes the lender requests the homeowner to sign a promissory note (an IOU) for the difference or a portion of the difference between what the house sold for and what the loan balance currently is. Blackstone Realty, LLC is committed to fighting for our sellers and demand that the bank complete the sale as a full and final settlement of debt. Largest benefit if your property is your primary residence: The largest benefit comes from the IRS. The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief. This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. Before the The Mortgage Forgiveness Debt Relief Act, if anyone completed a short-sale they were taxed on the difference as ordinary income, and would obtain a 1099 at the end of the year along with a tax bill. Under the new law, if the house is your primary residence, your will NOT be taxed on the diffence and would have no tax consequences in this regard. We are familiar with the process of working with banks in order to make a transaction run quickly and smoothly.

The short sale process

Scenario

Homeowner contacts Realtor about selling the home. Realtor discovers that the homeowner owes more than the house is worth. Realtor then discovers that homeowner has not made a payment for several months.

Outcome

Realtor assembles necessary documents that the bank will request, such as:

- Last 2 years tax returns

- Last 4 paystubs if employed

- Last 2 months bank statements

- Income and expenses for seller

At this point seller prepares a “hardship letter” which details to the bank why the seller is unable to pay the mortgage. Once this package is assembled and a contract is presented, the Realtor sends the package to the “loss mitigation” division of the bank who holds your mortgage. The bank reviews the package and requests a local real estate broker not connected to the transaction to inspect the property and give an opinion of value. This is known as a Broker Price Opinion (BPO). In the last few years, due to the increased demand banks have for determining the value of the property, instead of using appraisers which cost several hundred dollars, banks have been using local Realtors to give detailed market analyses (similar to a comparative market analysis). This report is then used to determine whether the asking price and contract price is acceptable to them. If the BPO value comes in much higher, then the bank will reject the offer, thinking it can get more if it forecloses on you. But if the bank feels that the value is correct, the bank will approve a contract at that price.

Once the price is approved we move forward just like a regular closing, only the bank will pay all closing costs and fees which would normally be paid by the seller (you). This is the only way to close a short sale.

Common misunderstanding #1: The friendly investor promised me a quick close with no problems.

Truth: THE DIFFERENCE BETWEEN INVESTORS AND REAL ESTATE AGENTS

Investors try to purchase your home for the LEAST POSSIBLE PRICE. I try to get you the GREATEST POSSIBLE PRICE. The closer the purchase price is to your loan amount, the greater the chance that the bank will accept the offer. I have been helping homeowners in foreclosure for 11 years; I know how to deal with banks and get your sale approved.

Don’t hire just any Realtor to represent you in this transaction. There are many complexities involved in a short sale that many Realtors are not aware of. Many times Realtors who sell homes are not familiar with the additional steps required when a home is in foreclosure.

Common misunderstanding #2: Its all up to the bank to decide whether to accept or reject an offer.

Truth: THE DIFFERENCE BETWEEN THE BANK ACCEPTING YOUR SHORT SALE AND REJECTING IT:

Whether the bank accepts an offer for less than your mortgage balance hinges on YOUR REALTOR. Your Realtor must present a compelling reason for the bank accepting a lower amount than what you owe on your home.

We prepare an extremely detailed market analysis of your home which I submit along with an offer. We also prepare a detailed spreadsheet that shows what the bank will be able to reoup from selling the home today vs. all the extra costs of foreclosing on the home and selling it on their own. We speak the bank's language - dollars and cents. While banks do not require this, and only a few Realtors do this, we believe this is one reason why we are so successful.

Blackstone Realty, LLC is well-known in the industry among several large banks to be large providers of BPOs (broker price opinions). The banks only hire experienced agents to complete these reports for them, and Blackstone Realty, LLC routinely prepares 60-80 of these reports for many banks on a weekly basis. This helps build our credibility as a reliable source of market value information, and helps solidify our opinion of value. This also helps us price the property correctly and accurately so that we receive an offer quickly.

Common Misunderstanding #3: I Will Claim Bankruptcy to Save My House

Truth: BANKRUPTCY WILL ONLY DELAY A FORECLOSURE AND WILL DEVASTATE YOUR CREDIT.

If you file for personal bankruptcy a so-called "automatic stay" is placed on all your creditors, including the foreclosing lender, by the court. HOWEVER, the stay is only a temporary fix to the situation.

Bankruptcy never permanently stops home foreclosure. It only gives you relief from unsecured creditors like credit cards and prevents certain creditors from pursuing collection action against you. It does NOT discharge debts such as taxes, child support, alimony or student loans, nor can it give you relief from other secured creditors — like your lender — whose debt is secured by the home you're living in.

In fact, the "automatic stay" is only effective so long as the court wants it to be in place. At any time the court can grant your lender's motion for "relief from the automatic stay." Once the court grants that motion the foreclosure against your home can proceed to conclusion. Furthermore, the damage to your credit from a short-sale is far less than the damage caused by a bankruptcy.

Common Misunderstanding #4: I already missed a few payments, so my credit has already decreased sharply. It doesn’t matter if the bank forecloses on me.

Truth: WHILE YOUR CREDIT SHOWS THE DEROGATORY LATE PAYMENTS, A SHORT SALE WILL HURT YOUR CREDIT FAR LESS THAN A FORECLOSURE. It is common for homeowners to purchase their next home in just a couple of years after completion of a short sale. Homeowners with a foreclosure have to wait much longer. This also translates to credit needed for cars and businesses. A short sale will stop any further negative marks on your credit.

Your credit is being affected right now. I know you already know that. I want to speak with you as soon as possible to show you how you can avoid further damage to your credit.

Common Misunderstanding #5: Someone called me and said they were loan modification specialists. They said if I paid them a fee they would negotiate a lower monthly payment for me.

BEWARE: Many people will claim to be loan modification specialists, however many groups are known as scams. IT IS ILLEGAL FOR LOAN MODIFICATION SPECIALISTS TO COLLECT FEES UP FRONT. Also, Chances are your bank will work with you directly. If you are still uncomfortable speaking with bank representatives, speak with an attorney who is knowledgeable about the process.

Common Misunderstanding #6: If I just forget about the house the bank will foreclose and it will be over.

Truth: IF THE BANK FORECLOSES ON YOUR HOUSE, THE BANK CAN COME AFTER YOU FOR A "DEFICIENCY JUDGMENT" FOR THE DIFFERENCE BETWEEN THE MORTGAGE BALANCE AND WHAT THE BANK SOLD THE HOME FOR. While hardly anyone who has been recently foreclosed has had a deficiency judgment filed on them, it is important that you know that banks are currently packaging these “bad debts” and selling them to debt collectors in the billions of dollars. These creditors have several years to file a deficiency judgment, and my prediction is within the next few years hundreds of thousands of deficiency judgments will be filed. If you sell your house in a short sale the bank will most likely forgive the debt, meaning a deficiency judgment will not be filed against you.

MY GOAL IS VERY CLEAR: TO SHOW YOU HOW TO MINIMIZE ANY CREDIT DAMAGE AND TO GIVE YOU THE LEAST POSSIBLE EXPOSURE TO ANY POTENTIAL FUTURE LIABILITY.

Make sure you are represented by someone who has successfully completed short sales. Make sure you are represented by someone who has a solid understanding of foreclosure from a legal standpoint – not just a sales standpoint.

Contact me today for a free consultation and so that we may determine the best course of action for you.

THE FACTS:

1. There is NO CHARGE for a consultation.

2. There is NO CHARGE to you for my representation.

3. I will represent you FOR FREE and be compensated directly from the bank that holds your mortgage.

4. I have been helping homeowners out of foreclosure - THIS IS ALL WE DO.

IF YOU ARE READY TO SELL YOUR HOUSE CALL US TODAY FOR A FREE CONSULTATION SO THAT WE CAN GET STARTED!

	Home For Buyers For Sellers Asset Managers Commercial FREE Market Snapshot Search MLS About Us Contact Us Foreclosure Options Marketing Plan Setting a List Price Get Your House Ready For Sale By Owner Pricing Your Home Why Homes Dont Sell Staging Checklist Foreclosure Help WHO I AM My name is Cyrus Malhotra, Broker/Owner of Blackstone Realty, LLC. I started helping people who were behind in their mortgages in 1998 when I first received my real estate license. In order to get a better grasp of the legal side of real estate and foreclosure, and to serve my clients better, I went to law school and studied real estate law. I then practiced real estate law for 3 years to get a thorough understanding of the inner workings of banks and foreclosure proceedings and represented homeowners in foreclosure. This has allowed me to gain a much more detailed understanding of the foreclosure process. (this is not an advertisement for legal services.) I did all this with one purpose in mind – to serve you better. Unlike most other people who will contact you, I never charge my clients any fees at any time. The only way I get paid is if I sell your house, in which case I negotiate my commissions with your bank. I also ask the bank to pay all closing costs and other fees associated with your sale, so you will not be liable for any costs at closing. HOW I CAN HELP YOU I specialize in short sales and am very familiar with the loss mitigation process. I have dealt with several banks and have closed several deals in this market. There are several alternatives if you find yourself in foreclosure. Before we get started we want to commend you for your bravery in facing the incredible burden of dealing with this. The natural reaction is to ignore the problem hoping it will go away, but it only makes matters worse. Whether your intention is to keep your house or get rid of it, the next few paragraphs will give you a much better understanding of your options in today’s rapidly increasing foreclosure marketplace. Below you will also find some common misunderstandings about the foreclosure process and some things to beware of, along with a detailed view of the short sale process. Do you want to keep your home? Blackstone Realty, LLC always gives homeowners in foreclosure any and all information which can assist a homeowner in keeping in their house if that is their desire. These days most financial institutions have become much more lenient towards homeowners in foreclosure. The bailout has had an effect, and your lender will most likely be willing to speak with you about possible options available. Loan Modification - Depending on the lender, you have the possibility of modifying the terms of your mortgage. As long as you qualify, lenders are lowering rates to as little as 2% and modifying other terms to lower your payment to a manageable level. If you had a 2-,3-,4- or 5-year adjustable mortgage they may be able to help. *PLEASE NOTE: YOU MUST BE CURRENT ON YOUR MORTGAGE TO QUALIFY FOR A LOAN MODIFICATION. What to do: Either (1) call the bank yourself and speak to a representative in loss mitigation. I have so many homeowners who say, “I called them 6 months ago (or even longer) and they said they could not do anything”. If you have, please understand that banks are adapting more and more every month to financial conditions and they are realizing that it costs much less to negotiate with you than to not receive payments for over 1 year and then foreclose on you. If you still do not feel comfortable speaking with them there are several real estate attorneys who handle foreclosures. Lexis-Nexis has a list of certified attorneys in your area. Pitfalls: The major pitfall your have to be aware of is that only about 20-25% of loan modifications are successful. While this number is low, please realize you still have a chance. We always inform our clients of this statistic up front in order to give you a realistic idea of your chances of success. BEWARE: Many people will claim to be loan modification specialists, however many groups are known as scams. IT IS ILLEGAL FOR LOAN MODIFICATION SPECIALISTS TO COLLECT FEES UP FRONT. Also, chances are your bank will work with you directly. If you are still uncomfortable speaking with bank representatives, speak with an attorney who is knowledgeable about the process. Loan Write-Down - While not as common as a loan modification, few banks are allowing owners to stay in their homes and actually "writing down" the amount owed to the bank. Typically this is done with higher-end properties which have a significant difference (over $100,000) between the loan balance and the market value of the property. The only bank that we know doing this is Bank of America, and only in limited circumstances; however if your desire is to keep your home, it is always worth a shot to ask your lender if they provide this service. Litigation – you can hire a real estate attorney and defend the foreclosure lawsuit based on various defenses (i.e. usurious lending practices). The only issue is that since foreclosure defense and the tactics used is a relatively new specialization, the outcome of these defenses will ultimately be tried in court in the future. The merit of these defenses has yet to be applied, and the outcome is uncertain. While this can buy you additional time in your house, there is no guarantee that it will fix your problem permanently. Pitfalls: In most cases you have to pay the attorney monthly, between $200-$500, in most cases for upwards of 1-2 years before your case is tried in court, and there is no guarantee that the legal defenses will have any effect on discharging your mortgage. Bankruptcy – Bankruptcy is an alternative many homeowners are considering. When a bankruptcy is filed with the court, an "automatic stay" is placed on all assets preventing creditors from coming after those assets (cars, furniture, homes, etc). Furthermore, the damage to your credit from a short-sale is far less than the damage caused by a bankruptcy.While Blackstone Realty, LLC cannot give legal advice, we can recommend that you find a good bankruptcy attorney in your area if you are considering this route. The laws have changed in the past few years, and it is not as easy as it once was. Your attorney will be able to discuss your possible avenues. Pitfalls: Bankruptcy does not mean you get to keep your house without making any payments. The "automatic stay" is only effective so long as the court wants it to be in place. At any time the court can grant your lender's motion for "relief from the automatic stay." Once the court grants that motion the foreclosure against your home can proceed to conclusion. In many cases bankruptcy is merely a "stall tactic", and once the bankruptcy is over your lender will resume the foreclosure process. Also, bankruptcy will have a devastating effect on your credit for many years to come. You must carefully consider this option. Do you just want to get rid of the house? There are two options if you do not want to keep your house. Deed-in-lieu of foreclosure – In this situation the bank accepts the deed to your property. You simply have to request a deed in lieu package. Keep in mind the package takes several weeks to arrive, so make sure to order your short sale package as well. Blackstone Realty, LLC is familiar with the forms and information required and can assist you in making a package on short notice. Pitfalls: In most cases the bank will not consider a deed-in-lieu unless you have had your home on the market and have been unsuccessful in selling it. The bank wants you (more specifically your Realtor) to show that an effort has been made to sell the home, as the bank does not want the additional burden and cost of simply taking every home back and trying to sell it themselves. Simply placing a "for sale" sign on the property does NOT qualify as trying to sell the home, it must be on the MLS, and must be advertised aggressively. Please view our marketing plan to see how we market all our listings. In rare cases when we are unable to sell a home, once the bank sees how aggressively we have been marketing the home they will be much more inclined to accept the deed-in-lieu. Short-sale – The short-sale of a property has some pitfalls which need to be considered; however, a short-sale is better than a foreclosure for several reasons. Pitfalls: Credit – The borrower’s credit will be adversely affected from the late mortgage payments. It will show as a settlement on your credit report. Benefits: First and foremost, YOU DO NOT HAVE TO PAY ANYTHING TO ANYONE AT ANY TIME. OUR COMMISSION AND ALL CLOSING COSTS WHICH ARE TYPICALLY PAID BY THE SELLER WILL BE PAID BY THE BANK*. while a short-sale hurts your credit, a foreclosure is far more devastating. Furthermore, if the lender forecloses on your house, and there is a shortage once the bank sells the home (meaning what the bank sold the home for vs. what you owed on the home), the lender has the right to pursue you for a deficiency judgment* for the difference. This is a problem many homeowners who have foreclosures on their records may run into a few years down the road as banks are packaging these deficiency judgments and selling them on the securities market (similar to junk bonds). The debt collectors who are buying these security instruments have several years before coming after the homeowners. Many believe these debt collectors are waiting for the dust to settle before pursuing these deficiency judgments. With a short-sale, your debt is cancelled at closing. Sometimes the lender requests the homeowner to sign a promissory note (an IOU) for the difference or a portion of the difference between what the house sold for and what the loan balance currently is. Blackstone Realty, LLC is committed to fighting for our sellers and demand that the bank complete the sale as a full and final settlement of debt. Largest benefit if your property is your primary residence: The largest benefit comes from the IRS. The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief. This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. Before the The Mortgage Forgiveness Debt Relief Act, if anyone completed a short-sale they were taxed on the difference as ordinary income, and would obtain a 1099 at the end of the year along with a tax bill. Under the new law, if the house is your primary residence, your will NOT be taxed on the diffence and would have no tax consequences in this regard. We are familiar with the process of working with banks in order to make a transaction run quickly and smoothly. The short sale process Scenario Homeowner contacts Realtor about selling the home. Realtor discovers that the homeowner owes more than the house is worth. Realtor then discovers that homeowner has not made a payment for several months. Outcome Realtor assembles necessary documents that the bank will request, such as: - Last 2 years tax returns - Last 4 paystubs if employed - Last 2 months bank statements - Income and expenses for seller At this point seller prepares a “hardship letter” which details to the bank why the seller is unable to pay the mortgage. Once this package is assembled and a contract is presented, the Realtor sends the package to the “loss mitigation” division of the bank who holds your mortgage. The bank reviews the package and requests a local real estate broker not connected to the transaction to inspect the property and give an opinion of value. This is known as a Broker Price Opinion (BPO). In the last few years, due to the increased demand banks have for determining the value of the property, instead of using appraisers which cost several hundred dollars, banks have been using local Realtors to give detailed market analyses (similar to a comparative market analysis). This report is then used to determine whether the asking price and contract price is acceptable to them. If the BPO value comes in much higher, then the bank will reject the offer, thinking it can get more if it forecloses on you. But if the bank feels that the value is correct, the bank will approve a contract at that price. Once the price is approved we move forward just like a regular closing, only the bank will pay all closing costs and fees which would normally be paid by the seller (you). This is the only way to close a short sale. Common misunderstanding #1: The friendly investor promised me a quick close with no problems. Truth: THE DIFFERENCE BETWEEN INVESTORS AND REAL ESTATE AGENTS Investors try to purchase your home for the LEAST POSSIBLE PRICE. I try to get you the GREATEST POSSIBLE PRICE. The closer the purchase price is to your loan amount, the greater the chance that the bank will accept the offer. I have been helping homeowners in foreclosure for 11 years; I know how to deal with banks and get your sale approved. Don’t hire just any Realtor to represent you in this transaction. There are many complexities involved in a short sale that many Realtors are not aware of. Many times Realtors who sell homes are not familiar with the additional steps required when a home is in foreclosure. Common misunderstanding #2: Its all up to the bank to decide whether to accept or reject an offer. Truth: THE DIFFERENCE BETWEEN THE BANK ACCEPTING YOUR SHORT SALE AND REJECTING IT: Whether the bank accepts an offer for less than your mortgage balance hinges on YOUR REALTOR. Your Realtor must present a compelling reason for the bank accepting a lower amount than what you owe on your home. We prepare an extremely detailed market analysis of your home which I submit along with an offer. We also prepare a detailed spreadsheet that shows what the bank will be able to reoup from selling the home today vs. all the extra costs of foreclosing on the home and selling it on their own. We speak the bank's language - dollars and cents. While banks do not require this, and only a few Realtors do this, we believe this is one reason why we are so successful. Blackstone Realty, LLC is well-known in the industry among several large banks to be large providers of BPOs (broker price opinions). The banks only hire experienced agents to complete these reports for them, and Blackstone Realty, LLC routinely prepares 60-80 of these reports for many banks on a weekly basis. This helps build our credibility as a reliable source of market value information, and helps solidify our opinion of value. This also helps us price the property correctly and accurately so that we receive an offer quickly. Common Misunderstanding #3: I Will Claim Bankruptcy to Save My House Truth: BANKRUPTCY WILL ONLY DELAY A FORECLOSURE AND WILL DEVASTATE YOUR CREDIT. If you file for personal bankruptcy a so-called "automatic stay" is placed on all your creditors, including the foreclosing lender, by the court. HOWEVER, the stay is only a temporary fix to the situation. Bankruptcy never permanently stops home foreclosure. It only gives you relief from unsecured creditors like credit cards and prevents certain creditors from pursuing collection action against you. It does NOT discharge debts such as taxes, child support, alimony or student loans, nor can it give you relief from other secured creditors — like your lender — whose debt is secured by the home you're living in. In fact, the "automatic stay" is only effective so long as the court wants it to be in place. At any time the court can grant your lender's motion for "relief from the automatic stay." Once the court grants that motion the foreclosure against your home can proceed to conclusion. Furthermore, the damage to your credit from a short-sale is far less than the damage caused by a bankruptcy. Common Misunderstanding #4: I already missed a few payments, so my credit has already decreased sharply. It doesn’t matter if the bank forecloses on me. Truth: WHILE YOUR CREDIT SHOWS THE DEROGATORY LATE PAYMENTS, A SHORT SALE WILL HURT YOUR CREDIT FAR LESS THAN A FORECLOSURE. It is common for homeowners to purchase their next home in just a couple of years after completion of a short sale. Homeowners with a foreclosure have to wait much longer. This also translates to credit needed for cars and businesses. A short sale will stop any further negative marks on your credit. Your credit is being affected right now. I know you already know that. I want to speak with you as soon as possible to show you how you can avoid further damage to your credit. Common Misunderstanding #5: Someone called me and said they were loan modification specialists. They said if I paid them a fee they would negotiate a lower monthly payment for me. BEWARE: Many people will claim to be loan modification specialists, however many groups are known as scams. IT IS ILLEGAL FOR LOAN MODIFICATION SPECIALISTS TO COLLECT FEES UP FRONT. Also, Chances are your bank will work with you directly. If you are still uncomfortable speaking with bank representatives, speak with an attorney who is knowledgeable about the process. Common Misunderstanding #6: If I just forget about the house the bank will foreclose and it will be over. Truth: IF THE BANK FORECLOSES ON YOUR HOUSE, THE BANK CAN COME AFTER YOU FOR A "DEFICIENCY JUDGMENT" FOR THE DIFFERENCE BETWEEN THE MORTGAGE BALANCE AND WHAT THE BANK SOLD THE HOME FOR. While hardly anyone who has been recently foreclosed has had a deficiency judgment filed on them, it is important that you know that banks are currently packaging these “bad debts” and selling them to debt collectors in the billions of dollars. These creditors have several years to file a deficiency judgment, and my prediction is within the next few years hundreds of thousands of deficiency judgments will be filed. If you sell your house in a short sale the bank will most likely forgive the debt, meaning a deficiency judgment will not be filed against you. MY GOAL IS VERY CLEAR: TO SHOW YOU HOW TO MINIMIZE ANY CREDIT DAMAGE AND TO GIVE YOU THE LEAST POSSIBLE EXPOSURE TO ANY POTENTIAL FUTURE LIABILITY. Make sure you are represented by someone who has successfully completed short sales. Make sure you are represented by someone who has a solid understanding of foreclosure from a legal standpoint – not just a sales standpoint. Contact me today for a free consultation and so that we may determine the best course of action for you. THE FACTS: 1. There is NO CHARGE for a consultation. 2. There is NO CHARGE to you for my representation. 3. I will represent you FOR FREE and be compensated directly from the bank that holds your mortgage. 4. I have been helping homeowners out of foreclosure - THIS IS ALL WE DO. IF YOU ARE READY TO SELL YOUR HOUSE CALL US TODAY FOR A FREE CONSULTATION SO THAT WE CAN GET STARTED! 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