| There are many rumors out there and bad information | | | | Banks are not in the business of foreclosing on |
| on what is and isn't in today's market. This is when a | | | | properties, but in the business of lending money. The |
| lender agrees to take less than what's owed on the | | | | costs of the foreclosure process, directly and indirectly, |
| property. Most people are amazed when they see | | | | are what cost the banks money. As long as a |
| that banks will negotiate debt when a property is | | | | borrower in foreclosure can show the bank or lien |
| inevitably headed towards foreclosure. Borrowers do | | | | holder that they will net more money accepting a |
| need to prove some type of financial hardship in most | | | | lesser pay off vs. going to foreclosure, the majority of |
| cases. Many people tend to think that foreclosures and | | | | banks in this market will approve the deal. In our |
| pre-foreclosure properties are the same, but that is not | | | | current market this is another way to mitigate the |
| the case. | | | | bank's loss. They will encourage this option instead of |
| On a short sale the borrower or person in foreclosure | | | | foreclosing on the property. |
| is the owner of the property. BANKS DO NOT OWN | | | | These transactions can take more time than |
| SHORT SALES. This can also known as a | | | | purchasing a regular bank owned foreclosure because |
| pre-foreclosure sale. The seller is participating to avoid | | | | the final net amount to the bank must be negotiated. If |
| a costly foreclosure from appearing on their credit | | | | someone is inexperienced in this area it is strongly |
| ultimately, which can be very damaging. A foreclosure | | | | advised that they seek the advice of a professional |
| will report to a borrower's credit and will have negative | | | | loss mitigation specialist. A typical time frame on |
| effects for quite a while, many say up to 7 years. | | | | negotiating a short sale is 90-120 days. Timing will differ |
| They can also avoid deficiency judgments by | | | | based on the bank and deal. If you are a purchaser |
| negotiating a settled account on their credit. Banks do | | | | trying to purchase these types of transaction you |
| not like short sales, but they prefer them over a | | | | must have patience. |
| foreclosure. | | | | |