Benefits of Short Sale vs Foreclosure

Here is a list of some of the Benefits that a Short Sale has over letting your home go to Foreclosure:

The biggest question I get asked when I start speaking about a Short Sale is what will it do to your credit rating. John's answer.... it is going to hurt your credit score but in general a foreclosure would hurt your credit score a lot more. However a Short Sale will allow your credit to recover faster then a foreclosure and in most cases you can apply for a mortgage in 2 years vs 7 years for a foreclosure.

Many people believe that the easiest way to dispose of a home is through foreclosure, but what few realize is that (depending on loan type) they can potentially be sued after foreclosure by the lender for the deficiency. Loans like a home equity line of credit are a personal debt and therefore are not automatically extinguished by foreclosure.

The good news for my clients is that Arizona as Anti-deficiency laws on the books while they still do have some grey area. If you are doing a Short Sale with me you will be protected because I insist that we use a Real Estate Law Firm in order to make sure you are protected.

Until Next Time,

John C. Palmay

azrealtorjp@gmail.com

480-529-9063

@johnpalmay on Twitter

Short Sale.. Simple Terms

Even though the Real Estate Market is full of Short Sales and Foreclosures I still seem to get questioned on what exactly is a Short Sale and is it right for me. So I tried putting the answer in very simple terms below.

What is a Short Sale ?

A short sale occurs when the outstanding obligations (loans) and cost of selling are greater than what the property can be sold for. Short sales are a way for a home owner to avoid foreclosure and still be able to pay off their loans (s) by settling with the lender.

OK now to more of the tricky part... The terms under which a lender approves a short sale depend of the borrower's circumstance and of course as well to the Lenders (bank) own set of guidelines.

Below is a example of a Ideal Short Sale Candidate :

1. Your payment is delinquent or could be in the very near future. (Note: Some lenders won't work with home owners who are current making loan payments and it is best to check with lender on their policy)
2. You may have a hardship, some of the examples are Divorce, loss of job, medical bills,or even a reduction in your paycheck.
3. You have no Major assets, if the Bank notices you have a very large bank account or other assets then they are least likely to work with you. (401k's and IRA's are the exception, the banks cannot go after these.)

The next posting I will tackle : Short Sale vs Foreclosure

Until Next Time,

John C. Palmay

480-529-9063

azrealtorjp@gmail.com

@johnpalmay on Twitter

The Banks Are Holding The Home Sale Process Up !

I keep hearing reports that the banks are losing up the purse strings on some of the mortgages that people can no longer afford to live in. Funny I have several transactions going on right now and we are still waiting for the banks to sign off on these deals.

I have always enjoyed Real Estate, I like working with people, and have enjoyed what usually was a normal 45 day sales cycle from the time you first met your client to the time it took when you could finally open up the front door of the New home and hand then over the keys. Well now this sales cycle has ballooned into a 120 day plus sales cycle if you’re lucky due to the fact that Arizona has so many Short Sales going on right now and that most banks aren’t writing off these loans all to quickly at the moment. Or they just aren’t writing the right one off, the ones I am involved inJ!

I have to admit I have never been a fan of the big banks (although full disclosure I do have an account with Wells Fargo) and this makes me hate them even more. Clearly right now Bank of America is the worse bank to be dealing with, ok let me be a little fair they did buy Countrywide and acquired a complete nightmare with that transaction. With that said they still are the worse when it comes to them working the Short Sale Process, if they even have a process.

I realize that no business wants to right off 200k of a bad debt and the banks are holding many of these, but the longer they hold onto to them the more it is costing them. The market, especially here in Arizona isn’t suddenly going to shoot up 20% in value overnight so these banks need to start getting this bad loans off the books already. They need to use the Governments money or really our money to fix this issue instead of worrying about paying the government back so that all the top brass can get some fat bonus again.

Until Next Time,

John C. Palmay

The Palmay Real Estate Group

480-529-9063

Twitter: azrealtorjp

Come on Bank of America start clearing some of your bad loans, or at the very least work my deals first, my kids need to have a Christmas.

FHA Loan Limit Correction

I need to correct my Post from the other day regarding the 2010 FHA Loan Limits.

The FHA loan limits in Maricopa County, Arizona will not be changing and will remain at $346,250 for 2010. I received information the other day which wasn't accurate so I wanted to repost this information ASAP. If you have any questions about the limits for 2010 please feel free to give me a call at 480-529-9063.

Thank You and Until Next Time,

John C. Palmay

The Palmay Real Estate Group

480-529-9063

Twitter - azrealtorjp