WHAT IS A SHORT SALE?
If you’re a Las Vegas resident, when you owe the bank more than your home is worth (you’re underwater), and need/want to sell it, you’re looking at a Las Vegas short sale. Or, in more simple terms, if your property won’t sell for enough money to pay the bank back every penny you owe them, that’s a short sale. In Las Vegas, about 80% of the homes are underwater, and a majority of all real estate transactions are completed as short sales.
Any balance that won’t be paid off by the sale is called a “deficiency”. And the most important part of the short sale is getting a “deficiency waiver”. A deficiency waiver is a document from the bank releasing their claim on any left-over balance. In other words, it’s your guarantee that the bank won’t sue you for the balance of the loan in the future. That’s why you need P and A.
There are a number of ways in which you may find yourself under water or upside down on your mortgage, owing more than your home is worth. The housing market in many areas was overinflated for a number of years, and when this bubble deflated about five years ago, home values plummeted. If you bought your home more than five years ago, you may have bought an over-valued home which is now worth much less than you owe on it. The other factor which occurred in tandem with the drop in the housing market was the sub-prime and adjustable rate mortgage crisis. Many people were able to afford homes only by making loans that they really could not afford, and banks were all too willing to make these loans. Many loans such as ARMs and Option ARMs had adjustable interest rates that reset at much higher rates than the borrower initially encountered. If your mortgage payments have outstripped your ability to pay while the value of your home has gone down, a Short Sale lawyer may be the answer to your troubles.
Short Sales are preferable to Deeds in Lieu, because with the Short Sale you are able to pull out at least some of the equity in your home. A Short Sale, however, is not always possible or practical. In those cases, we can negotiate a Deed in Lieu on your behalf, avoiding foreclosure and helping you to get back into a property that you can afford without the obstacle of a foreclosure on your credit report.
If your modification doesn’t come with a principal reduction, or is rejected outright by the bank, your attorney will use the documentation trail he created during the modification process to PROVE that you’ve negotiated in good faith, and work to FORCE the bank to accept a short sale with a full deficiency waiver.
If you’re on the fence about modifications and short sales, call Peters and Associates today at 702-818-3888 to schedule your free consultation and learn more about the All-In-One program!
First off, one of the requirements the banks put into place when authorizing a short sale is called an “arm’s-length agreement”. Several non-attorneys believe that a relatively new law, known as the Nevada Homeowner’s Bill of Rights (NHBR), prohibits arm’s length agreements or declares them invalid. Unfortunately, that’s simply not the case. The NHBR, or SB321, simply states that the State of Nevada doesn’t require such agreements, but makes it clear that it doesn’t prohibit them either. Unsuspecting homeowners may be inadvertently committing federal bank fraud by short selling to themselves. At present, bank fraud carries a maximum penalty of a one million dollar fine and ten years in federal prison.
As if that weren’t bad enough, in every short sale and stay program there is a period of time in which you DO NOT own your own home. In reality, you’ve become a renter and all of your “homeowner’s rights” are eliminated. You’re signing your title over to a non-profit or other entity with the hope that you’ll be able to buy it back in the future. Considering that nearly every single fraud-alert warns about signing your title over to any company that’s “promising” to help with your home, do you really think these programs are a good idea? Fortunately, experienced, full-service law firms like Peters and Associates understand that if you want to keep your home, lowering your payment and mortgage balance rarely require you to sign over the title. Please understand, if a short sale buyback is your best option, our attorneys are happy to handle your case, help you navigate the complex paperwork, and protect you from potential future criminal investigations or liability.
A. Real estate agents excel at buying and selling property, but they are not experts in contract law. The reason you are entering using a short sale attorney is not because you want to sell your home; it is because you are either under water with your mortgage or cannot afford the payments and are facing foreclosure. Your main interest is not in selling the home; it is in getting out of the contract and in not being liable for the deficiency. A Short Sale must be negotiated first with the lender before you attempt to sell your home. For these issues you need a short sale attorney; not a real estate agent.
Q. Why not just walk away and let the bank foreclose?
A. You don’t owe your house to the bank; you owe an amount of money, which is secured by a mortgage on the house. When the bank forecloses, it takes that security – the house – and sells it for what it can to offset the amount you owe on your mortgage. But any deficiency left over remains your responsibility, and the bank can sue you for that deficiency and obtain a money judgment against you. If instead you negotiate a Short Sale, a Deed in Lieu of Foreclosure, or any other transaction such as Cash For Keys, your short sale attorney can probably relieve you of all financial obligations related to the house, including any deficiency.