There are many reasons in today’s economy that Ventura County home owners are falling behind on their mortgage or are no longer able to continue paying their monthly mortgage payment.  Once a home owner is unable to make further mortgage payments, short sale might be the key to help both the home owner and their lender.

Definition Of Short Sale

Short sale is the term used to describe an arrangement between the home owner and their lender in which the home owner pays back less than what they owe to their lender.  In a short sale the home owner owes more on their property than their home can sell for in the current market.  In such cases the lender agrees to the sale of the house at a price that is less than what the home owner owes them.

Most home owners believe that they have to be behind on their mortgage payment in order to be a short sale candidate.  However, if you have a valid reason why you may no longer afford to pay your mortgage, most lenders will allow you to short sale your home.  Yet, after 3 missed payments your lender will send you a notice of default (NOD).  Short sales after an NOD is really the first step in the foreclosure process.

Documents Required For A Short Sale

Your Realtor can help you with preparing the documents your lender requires to review before they approve your short sale.  Most lenders will require that you send them:

• Last 2 year tax returns, W-2’s, and any tax schedules
• Last 2 months pay stubs
• Last 2 months bank statements (all accounts)
• Copy of mortgage note and dead of trust
• A hardship letter in which you explain why you are unable to make any more mortgage payments.

You also need to submit to your lender all contact information for your Realtor in a document referred to as “Borrower’s Authorization” .  Once the lender receives this information your Realtor has permission to contact your lender and take care of the short sale on your behalf.

Who Qualifies for a Short Sale?

In order for your lender to consent to a short sale you need to prove to your lender that due to financial hardship you no longer can continue paying your mortgage.  Financial hardship are, but not limited, to a loss of job, divorce, death, illness, or job related moves.

If a Ventura County home owner has missed payments then they are a short sale candidate.  However, you do not have to have missed a payment in order to qualify for a short sale.

How Does A Short Sale Work?

Every lender has their own procedures and approach for dealing with short sales.  Also, every Ventura County home owner’s situation differs from another.  Therefore, there are no solid protocols for a short sale, but here are a few common traits.

In general, your lender will not look at your short sale file until an offer has been submitted by a potential home buyer.  Even after the review of your short sale file the lender has to calculate the advantage of selling your home as a short sale.

Due to all the required documents in a short sale process a successful short sale could be lengthy and overwhelming.  However, a short sale would look much better on your credit history than a foreclosure.

If you need any help or advice on Short Sale in Ventura County please don’t hesitate to call me, Mana Tulberg, (805) 443-8898.