Reply to question:

” I read over your article regarding short sales and security clearances; I have a question about deed in lieu of foreclosure and how it would affect the renewal of a security clearance. I am in Alabama, but the way if affects an individual should be the same regardless of state.”

Thanks for reading our website… Not completely sure of your current situation with your home in Alabama. Should you be in a time where you are needing too sell this home and you are “upside Down” on the property, I would recommend finding an experienced real estate agent/broker who has successfully completed several short sales. If you can find an agent who has completed the “Certified Distressed Property Expert (CDPE)” designation that would also be beneficial to you.

I cannot give legal advise, or comment on you clearance with the DOD. But what I do know is that during the review on your background file, they do complete a credit check. We have just successfully completed a short sale with a young family in the Military. The banks realize that this is an issue and should work to help you successfully complete the short sale process. I would recommend trying to avoid any foreclosure or deed in lieu as they are the same and will impact your credit score in the negative. Additionally I would contact you’re commanding officer (CO) and notify them of this pending issue. He might also be able to direct you in a direction of support. We understand that this dilemma is now affecting every income level. In our real estate market (Phoenix, Az) , over 65% of all real estate sales are now either Short sales, or foreclosures. When the decision is made to go for a short sale, it is very important to write a strong “Hardship Letter” that the banks require and state your hardship, including the fact that you are in the military and this could affect your future in the military.

How Will Foreclosure or Short Sale Affect My Credit Score and Credit Report?

Foreclosure or Deed-in-Lieu of Foreclosure – Both of these will affect your credit report and scores the same. The status of your overall credit when you either fell behind or will fall behind on your mortgage has an impact on the amount your credit scores will fall, which is usually between 200 to 300 points. The effect on your credit report and scores due to a foreclosure or a deed-in-lieu of foreclosure will be minimized if you had credit scores higher than 700 with impeccable credit history than if your credit was unfavorable.
Short Sale – Your payment history with your lender and how it is maintained will influence what happens to your credit rating during a short sale. If you do not become delinquent on your mortgage payment as you go through the short sale process then your credit should be minimally affected by a short sale. However, if you fall behind on payments during this time, your credit report and credit report will decrease sharply based on the number of payments on which you fall behind. Conversely, it will not be as bad as what you will suffer if you experience a foreclosure.

We wish you the best and if we can help find you an agent in your area to help you, please let us know.

Short Sale vs Foreclosure – Should I care??
Yes, With our current economy causing difficult times for many, it can feel like there are nothing but bad choices. However, some are not as bad as others. If you are finding yourself having difficulty with keeping up with your mortgage you do have some choices. We are continuing to educate ourselves so that we can offer you the best advise available. If we do not have the answer, we have a network of professionals who can help.

Short Sale: Even if you are behind on your mortgage or don’t think you can sell your home for as much as you owe, we may still be able to help you sell your home and get out from under your loans. A short sale is when you sell your home for less than the total amount you owe the lender(s). The process can be arduous but you avoid a foreclosure and generally will face less negative consequences on your credit score. We have successfully negotiated short sales and have usually gotten the lenders to forgive the shortfall on the payoffs.

We will help you through every step of the process. The lenders generally require several years of tax returns, bank statements, and a letter explaining why the loan cannot be paid in full (a hardship letter). We will help you on each step so that we can present a complete package to the lender(s).

Foreclosure: Foreclosure is when the bank actually goes through the process with the public trustee to sell a property at auction. The process starts when the Public Trustee sends a Notice of Election and Demand. From that point it can be as little as 120 days before the property is sold at auction. Frequently the bank ends up with the property. Even if the process has started, you may still be able to sell your home – if we can get an offer, most lenders will pause (delay) the foreclosure proceedings, giving more time to complete the sale.

Foreclosure can a have significant effect on your credit score, ability to obtain loans, and even security clearances. Should you currently hold a security clearance, please try to avoid a foreclosure at all costs, losing your clearance could cost you your job.

For example:

–foreclosure will lower your credit score 250 to 300 points for 3 years while a short sale might only drop your score 50 points for 12 to 18 months (because of late payments),

–foreclosure will make a potential homeowner ineligible for some loans for 5 years while the short sale may only affect eligibility for up to 2 years.

Over the past several months we have taken seminars pertaining to Real Estate marketing. The current buzz word is all about the social media. For those of us who are Realtors®, ActiveRain blogs appear to the most popular media site. However, it’s also the latest rage to be tweetered on Twitter, have a Facebook friend, or get LinkedIn. While social media continues to grow in popularity, and worthwhile for many reasons, it’s vital that Realtors not forget about the good old tradition of social networking.

Yes, that’s right – meeting people face-to-face, in person! Before the Internet age, many real estate professionals relied on getting out of the office to professional meetings to network, greet fellow colleagues (not to mention, prospects) and build relationships.

Building relationships – that’s what it’s all about and especially in today’s economy. And today, more than ever before, it’s important that Realtors “meet & greet,” shake hands, pass out business cards and have a personal conversation with potential buyers & sellers – not just one that’s typed in an e-mail.

Professionals in all fields of the business sector are starting to realize, especially in this economy, that you have to get out, put your face out there, build your credibility so you can not only grow your own business, but help others with new contacts.

So, if you’re a Realtor or other professional who is seeking new clients/friends, and is online typing away on different blog sites such as ActiveRain, Facebook, Twitter, LinkedIn, or whatever your social media of choice, good for you. However, don’t forget to put yourself OUT THERE in the public among potential prospects who might just appreciate meeting you in person, having the opportunity to shake your hand and laugh together out loud instead of “LOL” online.

There are MANY organizations available that hold networking events and/or need your involvement on a committee or council. Just today my wife suggested that I join the Mesa Leadership, Training and Development organization. This is a direction that I plan on following to both help our community but could also help our business.

It’s sad to see so many people, both friends and clients so discouraged about the looming possibility of losing their home; they ignore the less destructive option of a short sale and instead go to foreclosure (which takes many years to recover from). In desperation, many people try selling there home themselves to save on realtor’s commissions, pricing it just above what they owe, only to end up in foreclosure anyway.

You should know, and share with anyone who needs to know, that a homeowner can avoid a foreclosure if they act quickly. We’ve helped many homeowners this year avoid foreclosure by negotiating a short sale for them. Some people just don’t understand the detrimental effects of foreclosures, or are afraid of considering a short sale because they think it will cost them more money. We’d like to dispel some of the myths, and clarify how we can help. Here are some facts that show the benefits of a short sale compared to a foreclosure. We hope that the below information will help you in your decision making process.

Call us today if you or anyone you know needs help selling or buying real estate in the Phoenix/Mesa area. The information provided is from the Certified Distressed Property Institute of which we are members.

An important consideration when you are faced with a short sale or foreclosure on your home in Phoenix Arizona is what the outcome might be on your credit report. You also want to think about how long your credit rating will be negatively affected by a short sale or foreclosure.

The unfortunate fact is that foreclosure or deed-in-lieu of foreclosure will have a very adverse effect on your credit score even if you are only 30 days. The damage to your credit report gets worse as you go longer with your mortgage delinquency.

How Will Foreclosure or Short Sale Affect My Credit Score and Credit Report?

• Foreclosure or Deed-in-Lieu of Foreclosure – Both of these will affect your credit report and scores the same. The status of your overall credit when you either fell behind or will fall behind on your mortgage has an impact on the amount your credit scores will fall, which is usually between 200 to 300 points. The effect on your credit report and scores due to a foreclosure or a deed-in-lieu of foreclosure will be minimized if you had credit scores higher than 700 with impeccable credit history than if your credit was unfavorable.

• Short Sale – Your payment history with your lender and how it is maintained will influence what happens to your credit rating during a short sale. If you do not become delinquent on your mortgage payment as you go through the short sale process then your credit should be minimally affected by a short sale. However, if you fall behind on payments during this time, your credit report and credit report will decrease sharply based on the number of payments on which you fall behind. Conversely, it will not be as bad as what you will suffer if you experience a foreclosure.

What is the Waiting Period Before Buying Another Home?

What you plan to do after your short sale or foreclosure is an essential part of your decision-making process. You need to consider carefully which alternative you will take if you are planning to buy a home soon after your short sale or foreclosure. Your credit ratings will suffer as a result of either a foreclosure or a short sale. However, a foreclosure has a far more reaching impact on your credit report and ability to purchase a house than a short sale.

• Foreclosure or Deed-in-Lieu of Foreclosure – If you lose your home to a foreclosure or deed-in-lieu of foreclosure you will end up waiting between 36 and 60 months to buy another home.

• Short Sale – The short sale may be the best option if you want to buy a house soon afterwards. Your ability to buy a home within the first two years after your short sale will depend on your credit history (primarily your mortgage payment history). If you have kept your mortgage payments current with no payments more than 30 days late and did not agree to repay the debt relief, then Fannie Mae will allow you to immediately apply for a mortgage to purchase another home.

Foreclosure or Short Sale Decision

The decision between a foreclosure or a short sale is dependent on your mortgage and credit history leading up to the event. If you need to sell your home but owe more than it is worth, and your credit history is impeccable then the short sale is the best plan for you. If your history is negative, and you have no immediate need or plans to own your own house in the near future, then a foreclosure may be a better alternative. If it is possible, however, consider a short sale as it is the least damaging when it comes to your credit rating.

To find out more about your options of a short sale versus a foreclosure contact Arizona CDPE Experts: Rob Lanterman or Roxanne Pierson

What We Can Do For You In The Real Estate Market In Arizona

We have over 26 years of combined experience in selling residential real estate in both Arizona and Colorado.  We continually attend educational classes to keep abreast of the ever-changing world of real estate, Arizona legislation and advances in real estate that affect our local real estate market. We recently earned the Certified Distressed Property Expert (CDPE).  certification to help our clients who have fallen on hard times with their homes due to the falling real estate home values.

This certification has provided both knowledge and know how on all aspects of “Short Sales”.  With this information we are able to give our clients the best possible results for a bad situation and help them to move on with their lives. Fortunately with our experience and knowledge we have a high success rate in selling “short sales”. If you or anyone that you know would like information on selling a home by short sale as opposed to foreclosure please give us a call or drop us an email.

And by the way, we have a lender that can provide a loan after a completed short sale.  Every case is different so let us know before you miss any loan payments.

What a Great time to be a Home Buyer… Interest rates are low … you can get the best value for a property in both Maricopa and Pinal County’s in Arizona.  We just had an investor pick up a incredible  (HUD Property) in Gold Canyon  Arizona.   This home was in “Move in condition”, 20″ tile, a pebble tech pool, 3 bedrooms and 2 baths and great condition.  Wish we could find 100 more of these homes… Give us a call and we can help you find a deal for yourself.

HUD Homes:  To learn more about the history of HUD homes, visit http://en.wikipedia.org/wiki/Hud_homes

We can find other great deals for you, there are many homes on the market and many more coming on daily.  One needs to be aware of “Short Sale” properties as this process can take time and not always work out.  Talk with your real estate agent on the pro’s and con’s of a short sale home.

A bank owned property might not be a great bargain. Do your homework before making an offer. Make sure that the price you pay (if you’re successful) is comparable to other homes in the neighborhood. Consider the costs of renovation, including time to complete them. Don’t get caught up in a ‘bidding war’ and pay over market value.  It’s an old myth that “foreclosures” are a bargain.

GREAT NEWS FOR HOME BUYERS IN MESA ARIZONA, GIVES HOME BUYERS ADDITIONAL TIME TO PURCHASE

Extending the deadline: Although various proposals to extend and expand the credit have circulated in Congress for weeks, Senate lawmakers finally reached a deal in recent days. Under the terms of the agreement, the deadline for first-time home buyers to claim the $8,000 credit would be pushed back to April 30, 2010. But the term “deadline” doesn’t mean the same thing as it does in the current credit. The Senate agreement stipulates that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase. That’s much different from the current credit, in which transactions must be closed by November 30. Looked at one way, the effective deadline of the credit under this agreement is actually the end of June.

Existing buyers: But perhaps the most significant change is that current homeowners would become eligible for the tax perk as well. The current credit prevents home buyers who have owned a primary residence within the past three years from claiming the credit. The agreement, however, would allow current homeowners to claim up to $6,500 as long as the property they are vacating has been their primary residence for at least five years. Expanding the credit beyond first-time buyers is intended to boost home sales to “move up” buyers—those moving from one house to another—which some lawmakers, most notably Georgia Republican Sen. Johnny Isakson, argue is essential to a housing recovery.

More-affluent home buyers: The agreement also enables more affluent Americans to claim the tax credit. Senators moved to increase its annual income limits from $75,000 to $125,000 for single buyers and from $150,000 to $225,000 for married couples. These limits apply to both first-time and move-up buyers, although neither can purchase a home for more than $800,000 and still get the credit. Anyone taking the credit on a 2010 purchase can claim it on his or her 2009 tax return. And as long as home buyers live in the property they purchased via the credit for three years or more, the tax credit does not have to be repaid.