What is a short sale?

A short sale is a negotiated settlement. This is when the lender or other lien-holders agree to accept less than the amount owed as a payoff on a debt.

What are the two types of releases?
There are two types of releases the lender may offer if the short sale is approved.

- Full satisfaction: The homeowner/borrower is totally released from the debt owed.
- Partial release of lien: The lender will release the lien for a discounted price to allow

The property to be sold, but the homeowner/borrowers may still be responsible for the remaining balance.

How long does it take to complete a short sale?
A short sale completion is determined by the lender agreeing to an acceptance on the offer submitted to them. This usually takes 30-45 days…it could take more or less time. We at KHS  are awarded based on productivity. We benefit from a faster closing so we work to get it accepted and completed as fast as possible.

Do you negotiate with more than one lien holder?
Yes… We can take care of the entire process and work with all lien holders on your behalf. We have a team of experienced debt negotiators that have relationships built with major institutional lenders in the United States.

Who are our Clients?
Realtors, Investors, Brokers, Homeowners …anyone who needs loss mitigation services!

Why let KHS handle your loss mitigation needs?
Our team has over 10 years in experience working in loss mitigation and debt negotiation services. We know what the lender needs to get a short sale approved.

What is a Deed in Lieu?
Deed in Lieu is when the property is deeded back to the lender with the approval of the borrower prior to foreclosure. (This process may still leave a negative impact on the borrower's credit.)

Why should a lien holder accept less than the outstanding debt?
After the lender does an appraisal on the property and discovers that the value is less than the payoff, the lender will decide if it is worth further legal actions and cost. A business decision is made to either continue foreclosure action or accept the short sale offer.

What is loss mitigation?
Loss mitigation is a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of or has defaulted on his or her loan.

What is a loan modification?
A mortgage modification is a loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and reduce the monthly payments.

What is a forbearance plan?
A forbearance plan is a loss mitigation option where the lender arranges a revised repayment plan for the borrower that may include a temporary reduction or suspension of monthly loan payments.

What is REO (Real Estate Owned)?
After the lender forecloses on a property and purchases the lien back, a bank can then re-sale the property in the Real Estate Owned Department to try and recoup lost investments.

What is the BPO (Broker Price Opinion)?
A BPO (i.e. valuation or quick appraisal) gives an estimate of a property's fair market value according to company hired to produce it. The BPO determines if the debt owed to the lender exceeds the value of the property.

What is the borrower's Authorization to Release Information?
An authorization to release information is when the borrower gives permission to the lender to release information to a third party. The authorization to release information should always be presented to the lender in writing.

How can bankruptcy affect the possibility of doing a short sale?
Once a homeowner files bankruptcy we cannot proceed with the short sale request. We can restart the case after we receive permission from the BK court to sell the property or the bankruptcy is released.

How late in the pre-foreclosure process can you start a short sale?
It doesn’t matter how far a homeowner is behind. As long as we know the homeowner is unable to make any future payments, we can begin the process.

Will the bank allow a short sale when the property has equity?
Some lenders will accept a short sale if the property has equity and some will not.

Can the homeowner profit from a short sale?
No. The homeowner cannot receive any funds back from a short sale. There is an exception if the loan type is government backed. In that case the homeowner may be able to receive $500-1,000 at closing.

How will a short sale be reported to the homeowner’s credit?
Every case is different. We will always go for a full satisfaction for a short sale. Therefore this will generally show as “paid off” or “paid as agreed” on the homeowners credit. We are not credit professionals. We encourage you to see a credit professional for advice on this.

Is it okay to assign the contract to another buyer if I am unable to close?
Yes. The approval letter NORMALLY does not have the buyer’s name on it.

Can I lower my offer?
Once we submit the offer to the lender we cannot lower the amount. If you call us before we send over the offer we can lower the amount.

What will happen if I miss my BPO appointment?
Most generally we will be present at a BPO appointment. However, if you miss a BPO appointment this can hurt the short sale case. Sometimes the lender will close the file. Then we will have to start the process all over. The BPO is an instrumental factor in getting a short sale accepted.

Can I get an extension? I need more time to close.
There is no guarantee the lender will approve the extension. If we have to request an extension there will be another charge. Please talk to your assigned FMC Services Loss Mitigation Specialist about this.

Do you need a copy of the deed to do a short sale?
We do not need a copy of the deed to do a short sale.

What percentage will the bank take off of the value?
Every short sale case is different. The lender will consider multiple factors when determining the amount they will accept. (Hardship, comps, repairs, payments received, neighborhood … etc.)

The homeowner is no longer cooperating with us; can we still proceed with this deal?
If the homeowner is no longer cooperating we will close the file. They must have full confidence we are able to work with the lender and they must comply with various requests lenders send us to get the short sale accepted.

What should the homeowner do if the lender calls?
Refer them to their KHS Loss Mitigation Specialist

Do the homeowners need to attend their closing?
Generally Yes. The homeowner must attend the closing, except in rare cases when a third party has a POA.

What happens if the lender doesn’t accept our offer?
A short sale is not guaranteed. The lender does not have to accept our offer, but dealing with the KHS Loss Mitigation Team can greatly improve your chances of an acceptance.

Will the lender stop the foreclosure process after they receive our short sale offer?
Most lenders will not stop the foreclosure process until the SHORT SALE IS APPROVED. Sometimes a postponement is granted.

The closing cost is more than what we expected, can we decrease the net amount to the lender?
The net to the lender must remain the same.

Can I (buyer) contact the lender during this process?
No. Absolutely no one can contact the lender once we start the process except our authorized team. This is to prevent confusion to the lender and increase chances of getting a short sale accepted.

Why is the lender taking so long to make a decision on offer?
Again … we are not in complete control of how long a lender will take to accept our short sale offer. We ask that you please be patient.

How often will I get an update on my file?
Feel free to contact your KHS Loss Mitigation Specialist to receive updates on your file.

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KHS
Contact Us: info@shortsalespa.com

Website: www.shortsalespa.com 

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