Derek Kirk

As you are presently aware, from the late 80's to mid 90's the real estate industry in the state of California was suffering from a near depression. The first problem was that a great many individuals were unemployed or as we term it "underemployed", basically taking positions that do not generate the income they once had. The second major problem was the declining value of housing, which we believe is indicative of "over supply" and poor economic conditions. A home that once sold for $250,000 was then selling for $210,000 without any out-of-pocket expense for the shortfall or other costs associated with selling the property (brokerage, title and escrow, etc.) If you qualify for the short sale assistance program, your financial institution may agree to absorb the loss without any contribution from you either then, now or in the future.

In today's unsettled economic climate, many financial institutions are still facing an increasing number of delinquencies among homeowners, creating an unprecedented number of foreclosures. The banking industry's belief is that many of these costly foreclosure actions could be avoided (to benefit of homeowner's as well as the banking industry) by an increased awareness and usage of foreclosure prevention alternatives such as the "Short Sale Assistance" program.

Consider the costs associated with the foreclosure process (Attorney fee's, property preservation costs, delinquent payments, the eviction process, repossession of the property, selling the property once foreclosing, etc.) Most foreclosures result in losses for everyone involved - the borrower, the financial institution, the investor, and the mortgage insurance company. By providing an alternative to foreclosure, the short sale programs benefit both the bank and the homeowner. Homeowners experiencing hardship can be spared the painful ordeal of foreclosure and,in some situations, may be able to keep their home. Banks save money each time a short sale is completed because of the reduced costs involved when compared to the costly foreclosure process.

WHAT CAN A SHORT SALE DO FOR YOU?

Preserve credit standing
Allow you to sell your home with no out-of-pocket expense
Eliminate negative cash flow
May reduce tax liability
Avoid potential foreclosure
Release of mortgage obligation
Avoid possible bankruptcy
Relieves financial/emotional stress

Negotiating a short sale agreement is becoming more complicated than ever.
These transactions are technical, time consuming and require extensive financial documentation.

Sounds Great, But can I qualify for "The Program"?
Do any of the following apply to you?

Divorce
Filed bankruptcy
Death in the family
Delinquent on mortgage payments
Dispute between owners
Increasing credit card debt
Robbing Peter to pay Paul
Loss of employment or drop in income
Assumed liability due to someone else's action
Lifestyle change
Job relocation
Early retirement
If not, don't be discouraged!
These are just a few of the circumstances that may qualify you for this type of assistance.

KNOW ALL YOUR OPTIONS!

RENT IT OUT. Being a landlord isn't always as much fun as it looks like, especially if you live out of the area. Most people find they have to put $400 to $600 a month into the property to make up the shortfall on the rent vs. the mortgage, water, sewer, garbage and possible management fees. This doesn't take into consideration maintenance and repair costs or worse case - eviction and legal costs/rehabilitation of property and long vacancies.
LET SOMEONE ASSUME THE LOAN. This is a good option if similar homes are selling for approximately the same as your loan balance. As soon as a buyer does some comparison shopping and finds they can buy the same home for substantially less, the lust of the "no-down deal" is gone! Keep in mind that the loan has to be current and there are approximately $1,500 to $2,000 in closing costs for a seller. (Buyers have their own closing costs/lender fees to pay for.)
LET IT GO TO FORECLOSURE. The problem with this solution is obvious. Foreclosure notations stay on a credit report for 7 years and affect your ability to get credit of all kinds including Car loans, personal loans, future mortgages, etc. It may also affect future job applications/promotions.
APPLY FOR A "FORBEARANCE PLAN/REPAYMENT SCHEDULE". This will allow someone who is delinquent to catch up over time. If your financial crunch was temporary and is now behind you, most lenders will work with you to catch up on payments. Example: 3 months payments are missed due to injury on the job. Then lender may accept a payment and a half each month for six months to allow you to catch up.
MODIFICATION OF LOAN TERMS. If you have a higher-than-market-rate loan and can prove to the lender that you cannot afford the monthly payment (with full income and outgo verification) but, with a reduction in interest to today's current rate you could afford it, you may be a candidate for a "modification." It is a fine line to walk proving that you absolutely cannot afford the higher rate but would be able to afford it at todays' rate. Good Luck!
DO A "SHORT SALE". Derek Kirk can help you get your financial documentation in order and handle all facets of negotiation with your bank. A short sale allows you to exercise damage control and help preserve your credit. He will handle all of the real estate listing, selling, escrow, etc. and the best part is that the bank pays all the fees! One of the conditions of approval on your short sale is that the bank pays commissions, title insurance, escrow fees, termite work, etc.

If I'm falling behind on my payments or in default, is it too late?

Foreclosure Time Table

The Short Sale Assistance program is available to qualifying homeowners at any state of the foreclosure process. In most cases however, it is better to be pro-active and attempt the sale during the earlier stages of the foreclosure action. The reason is simply because as the foreclosure process progresses, the loss to the lender increases. Therefore, early intervention allows the cooperating financial institution to realize a significantly reduced loss.