Unfortunately, there are increasing numbers of homeowners that are unable to make their mortgage payments on time. If the mortgage payments continue to fall behind, and the homeowner owes more money than the house is actually worth, the foreclosure process begins. BGS3 wants you to know that there are a few possible outcomes for the homeowner at this point, and one of the more common occurrences as of late is the short sale. A short sale is when a Realtor and a homeowner land an offer to buy the pre-foreclosed home, and the mortgage lender agrees to the price. This is one way that BGS3 prevents the foreclosure process from actually happening.
BGS3 realizes that there are a lot of misconceptions about short sales, possibly due to their sudden increase in demand. Here are three of the more common misconceptions and their respective truths:
MISCONCEPTION #1: “A short sale is no less damaging to the homeowner’s credit than bankruptcy or foreclosure.”
THE TRUTH: In a foreclosure, the time period a borrower must take to rebuild his or her credit has been extended to 5 years, and several new requirements now apply after 5 years and up to 7 years after the completion date. This makes foreclosure more damaging to a homeowner's credit worthiness than bankruptcy, which requires a 4-year time period applied from either the discharge date or the dismissal date. Even in the event that the homeowner offers a deed-in-lieu of foreclosure, it still requires a 4-year time period before they are eligible to get a conforming loan again. A deed-in-lieu of foreclosure also includes additional requirements applied after 4 years and up to 7 years following the completion date.
In the event of a pre-foreclosure short sale, where the homeowner is willing to let their house sell for less than the amount owed, Fannie Mae only requires a 2-year time period for reestablishing credit, with no additional requirements. BGS3 can help make this happen.
MISCONCEPTION #2: “Banks and lenders rarely accept an offer on a short sale.”
THE TRUTH: Mortgage lenders lose thousands of dollars when a homeowner stops making their mortgage payments. These holding costs keep piling up until the house is sold. Consequently, when it's proven that a homeowner can no longer make their payments or qualify for a loan modification or forbearance plan, most lenders are willing to settle the mortgage debt for less than amount owed provided the proper process, documentation, and criteria are completed. In addition to saving on holding costs, the lender ("servicer") can also benefit from Freddie Mac and Fannie Mae ("investors"), which grants up to $1,500-2,000 for pre-foreclosure sales that meet certain conditions.
MISCONCEPTION #3: “There is no way to solve a pre-foreclosure situation without one of the parties involved taking a serious blow.”
THE TRUTH: BGS3 has an approach, Program 3648, that benefits everyone. The homeowner behind on mortgage payments can easily understand their rights and options. They can get free help from a Certified Program Representative (CPR) for BGS3 to do a forbearance plan or a loan modification to keep their home. Or, if they decide that a short sale is in their best interest, the CPR for BGS3 who is a licensed real estate professional can list their home at a price that it can actually sell regardless of the loan balance, still at no cost to the homeowner. BGS3 then processes the real estate short sale and negotiates the debt with the mortgage company for a nominal processing fee, which the mortgage company gladly pays for the help in clearing their books.
BGS3 Co-founder Jeremy T. Bowman states, "The homeowner wins by stopping the public foreclosure that can be more detrimental to their credit than a bankruptcy. The mortgage company wins by either bringing the payments current, or in the case of the short sale, getting rid of a property that they would have to add to their portfolio of non-performing assets where the costs soar even higher. The Certified Program Representative wins in the event that the mortgage company will pay a commission for the home to be sold sooner than later. The economy wins by the dramatic decrease in real estate inventory plaguing the market. Our mission is to halt the foreclosure process for thousands of homeowners in the oncoming weeks and months. With the big picture in mind, it was critical to be able to claim a winner on every one of those fronts."
VIDEO: http://www.bgs3.com/realtors.html
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