Prince Georges County Short Sale
Posted by Ben Puchalski on Wednesday, February 15th, 2012 at 12:35pm.
Last evening I met with a homeowner regarding his decision to complete a Prince Georges County Short Sale.  The meeting was initiated by the homeowners lender. In my experience this setup is rare. Typically, in these situations it is the borrower(homeowner) who must contact the lender to inform them that they would like to do a short sale. The fact that the lender has reached out to the borrower to initiate a Prince Georges County short sale shows you the situation that most lenders are faced with. In the last few years lenders have had to adjust their loss mitigation efforts due to the mistakes they have made when foreclosing on their borrower. That may all change soon. Last week 49 state attorneys general came to a settlement with the nation's largest banks. Negotiations between the state attorneys have been underway since 2010 when the robo signing issue was first publicized.Â
Last night the homeowner had a list of questions about the benefits of completing a Prince Georges County short sale versus letting the home go into foreclosure. First off, because this was a bank directed short sale they were offering him a several great incentives. The incentives included:
1-A cash payment. The borrower had negotiated a $3,000 payment. The lender would pay $1,100 to his new landlord, $400 when he vacates the property, and the remaining $1,500 when the short sale or deed in lieu of foreclosure(DIL) is complete. Note: Most of the time lenders do not pay money up front. They will only pay when the borrower vacates or the short sale/DIL is complete.Â
2-Mortgage will show PAID IN FULL on the borrower's credit report. According to Fannie Mae, a homeowner who completes a short sale will be eligible for a Fannie Mae-backed mortgage in 2 years. If a homeowner is foreclosed on they will become eligible for a Fannie Mae-backed mortgage in 7 years. See Fannie Mae website for more info.
3-No deficiency judgment will be filed against the borrower. Learn more about deficiency judgments here. Â
The homeowner from Prince Geoge's is going to review his options and get back to me. The homeowner told me that his attorney advised him to just let the home go into foreclosure. I do not believe that is the best option, however I always advise my clients to speak with an attorney regarding their situation. After the meeting, I feel the homeowner has more useful information to make an informed decision after weighting the costs and benefits of completing a Prince Georges County short sale.