Before You Put Your Chicagoland Home Into Short Sale, See If You Qualify For HAFA

Before You Put Your Chicagoland Home Into Short Sale, See If You Qualify For HAFA

In case you missed it, here are Home Affordable Foreclosure Alternatives (HAFA) February 2015 Updates

The government-sponsored program, Home Affordable Foreclosure Alternatives (HAFA), helps qualified homeowners seeking to transition to more affordable housing if they can’t afford their mortgage.  They offer two options, a short sale or a Deed In Lieu (DIL) of foreclosure.

To make the transition as favorable as possible, HAFA offers the following benefits:

• Free advice from HUD-approved housing counselors and real estate agents. (Ask CDPE certified Broker, Teresa Ryan, how you can avail of HAFA if you meet the criteria.)
• A HAFA short sale completely releases the homeowner from mortgage debt after selling the property.
• HAFA has a less negative effect on credit score than foreclosure or conventional short sales.
• Visit the HAFA website (http://www.makinghomeaffordable.gov/programs/exit-gracefully/Pages/hafa.aspx) for a complete list or call 630-276-7575 to speak to a Ryan Hill Realty HUD-qualified agent.

Homeowners that may be eligible for HAFA fall into the following *criteria:

• Documented proof of financial hardship
• First mortgage was less than $729,750
• Obtained mortgage before January 1, 2009
• Have not purchased a new home within the last 12 months
• No criminal convictions of felony larceny, theft, fraud, forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction in the last.10 years.

Here is an update by HAFA in February 2015.  It includes changes such as:

• Homeowners can receive relocation assistance of up to $10,000 at closing after February 1, 2015.
• Investor reimbursement increases to two dollars for every three dollars of short sales proceeds paid to a subordinate lien holder, up to a maximum of $8,000.
• Subordinate mortgage lien holders can be paid up to $12,000 of gross sales proceeds in exchange for a release of the lien and full release of borrower liability.

(Source: Certified Distressed Property Expert (CDPE))

If you are ready to do a Naperville short sale call me, Teresa Ryan at 630-276-7575.  As a Certified Distressed Property Expert (CDPE), and Managing Broker / Owner of Ryan Hill Realty – www.RyanHillRealty.com, I have the experience and tools to help you sell your Naperville short sale home.

Is It Possible to Buy Another Home 1 Year After A Naperville Short Sale?

Yes, you can buy a house within 1 year of a Naperville short sale if you meet the prerequisites.

Homeowners who have gone through short sales in Naperville now have another chance at homeownership, thanks to some changes in housing rules by the FHA and Fannie Mae.

Over the summer of 2014, the Federal Housing Administration (FHA) made some policy changes that now allow former homeowners and short sale sellers to purchase another home a year after the Naperville short sale was completed.  This is very good news for Naperville homeowners who qualify, considering the previous waiting time to get a new home loan and buy a new home used to be 2 to 3 years after a short sale.

The FHA released its “Back to Work” program where qualified borrowers can apply for a new home loan 1 year after a short sale, foreclosure, or bankruptcy.

Some of the qualification prerequisites for the borrower include:

• Should have lost their home as a result of a financial hardship that was no fault of their own.
• Should not have any other negatives on their credit report except for the short sale.
• Required to take counselling class on housing if he or she plans to take an FHA home loan.

With these new guidelines in place, homeowners who have gone through a Naperville short sale can now get to their second chance at homeownership faster if they meet the qualification criteria.

For more tips and advice on doing short sales in Naperville, please visit 

www.RyanHillCanHelp.com

If you are ready to do a Naperville short sale call me,  Teresa Ryan at 630-276-7575.  As a certified Short Sale agent and Managing Broker/owner of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville short sale home.

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Teresa Ryan

Broker/Owner, CDPE

Ryan Hill Realty

1288 Rickert Dr Suite 300, Naperville, IL 60540

630-276-7575

TRyan@RyanHillRealty.com

3 Tips for a Successful Naperville Short Sale

3 Tips for a Successful Naperville Short Sale

Naperville short sales continue to be in the market and many homeowners still face the reality of owing more than their Naperville home is currently worth.

There is no guarantee for a successful short sale, since no two short sales are alike. However, there are many factors in a Naperville IL short sale that are crucial to its success.

Here are some general rules to keep in mind when it comes to doing short sales in Naperville:

• Have All Your Financial Documents Ready for Your Naperville Short Sale Agent to Submit to the Lender.

Many short sales in Naperville get delayed or take a long time because the required documents were not submitted on time or were incomplete. All lenders have gatekeepers who screen short sale packages before the file moves on to the person who approves the short sale request. Make sure to sign all pages where your signature is needed. Even on electronic tax returns (where most homeowners almost never sign), the lenders will want to see your signature on those pages.  Make sure to include all pages of your bank statements, even the blank ones since these statements are numbered. If page 7 of 7 is not included, then it could be a cause of delay for your short sale.

• Continue Paying Your HOA fees.

If you live in a subdivision or condo with a homeowners’ association, you need to keep paying your HOA dues even if you are pursuing a short sale. Lenders are not willing to pay HOA fees as part of their expenses during a short sale. Many HOAs have specific statements in the contract which allows them to legally pursue a homeowner for back HOA dues. While some HOAs might agree with a settlement, getting a short sale bank or lender to pay the HOA dues might be a huge obstacle in trying to reach a successful short sale.

• Provide a Letter of Explanation for Missing Documents.

If, for some reason, you don’t have one of the lender-required documents like a paystub because you are currently unemployed, make sure to submit a letter of explanation on why the requested document is missing.

These are just some tips on how to successfully navigate through the Naperville short sales process.

If you want more tips about doing short sales in Naperville, visit - www.RyanHillCanHelp.com

If you are ready to do a Naperville short sale call me, Teresa Ryan at 630-276-7575.  As a certified CDPE and Short Sale agent and Managing Broker/Owner of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville short sale home.

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Teresa Ryan

Broker/Owner, CDPE

Ryan Hill Realty

1288 Rickert Dr Suite 300, Naperville, IL 60540

TRyan@RyanHillRealty.com

Top 7 Mistakes Sellers Make In Naperville Short Sales

Top 7 Mistakes Sellers Make In Naperville Short Sales

Many homeowners make mistakes during the short sale process when trying to sell their Naperville short sale home.  It is important to know how to avoid them in order to have a successful Naperville short sale:

1. Pricing the short sale too high or too low.

This is a standard mistake most homeowners make when handling their home sale, be it a traditional one or a short sale.  Some price too high, others too low – the key is to find that perfect price point.

Make sure your short sale property is priced just right by hiring an experienced Naperville short sale agent who can help you determine the best price for your home based on the current market conditions and comparable sales in your area.

The price of your short sale home should be attractive to all parties involved in the short sale: the lender, the buyer, the buyer’s agent, the buyer’s lender, and of course, you — the seller.

It may seem impossible to come up with a price that will be acceptable to all these parties, but it is possible. Coming up with the right price for a short sale listing is both an art and a science that has been mastered by experienced Naperville short sale agents.

2. Working with the wrong agent.

If you are hiring an agent who claims to be an expert in short sales, make sure to verify their experience by asking how many short sales he or she has successfully closed, and not just about those that he or she has listed.

If the agent has listings that have been on the market for 90 days or more without getting a single offer, this should be a red flag to you.

You want to work with a short sale agent who has at least two years of experience working with Naperville short sales and negotiating with lenders.

3. Bad Marketing Strategy.

If an agent tells you that pricing alone will sell your Naperville short sale property then proceeds to price your home too low, run away from this agent!  It is not true that pricing alone sells a short sale, let alone the lowest price.

Exposing your listing to the widest pool of potential buyers and using the best marketing methods will help you get offers on your short sale.

 4. Having Too Many Showing Restrictions.

If you have too many restrictions on showings and setting appointments (like no showings on Sundays), buyer’s agents will pass over your short sale listing for other listings without too many restrictions.

Your agent should make sure that your short sale home is always ready and available for showing any time a buyer’s agent calls in to request one.

 5. No Photographs or Bad Photographs.

Not putting photos of your short sale listing on the MLS is as bad as having bad photos. Both can turn off potential buyers.

A short sale without online photos gives potential buyers the impression that something is probably wrong with the property or the seller doesn’t care if the home sells or not.

On the other hand, bad photographs give buyers an impression that the home is not well-maintained or is falling apart. Online listings with the most photos are ranked the highest on most websites while those without photos drop to the bottom and are frequently overlooked by potential buyers.

6. Home is Not Well-Maintained or Not Staged Properly.

Just like any traditional listing, short sale sellers must make sure that their home is in good condition and is staged properly before putting it on the market.

A home that is full of clutter and has not been well-maintained will give buyers the impression that if the home was messy during showing, the owner might trash it before vacating it.

A home with uncut grass and in need of too many repairs will not be appealing to buyers. You can lower the price to attract bargain hunters and compensate for repairs, but this may not sit well with the lender. Banks usually will not accept a price reduction just because you want to avoid repairing damages in your home.

7. Waiting too Long to Act and Put the Home on the Market.

Sellers cannot afford to wait until they are facing foreclosure before they seek the help of an experienced Naperville short sale agent. Short sales are more complicated than traditional sales and take more time. The more time your short sale agent has to negotiate with the lender, the better chances of a successful short sale.

If you want to do a short sale, you need to give your short sale agent enough time to submit the short sale application to the bank.  Delays are a part of the short sale process – documents get lost and packages need to be re-faxed. Don’t wait until the last minute to submit your short sale package. Make sure the package you submit is complete and complies with all the requirements of the lender. Banks will not process your short sale if your documents are incomplete, causing longer delays and possible foreclosure.

These are just some of the most common mistakes sellers and their agents make while doing Naperville short sales. You can avoid most of these mistakes by making sure you work with only the best short sale agent in Naperville.

Call me, Teresa Ryan, a certified short sale expert, on 630-276-7575 today.  As a Broker/Owner of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville short sale home.

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Teresa Ryan

Broker/Owner, CDPE

Ryan Hill Realty

1288 Rickert Dr Suite 300, Naperville, IL 60540

630-276-7575

TRyan@RyanHillRealty.com

How to Qualify For A Naperville Short Sale

How to Qualify For A Naperville Short Sale

If you are considering a Naperville short sale, make sure you have a complete understanding of the process and your lender’s requirements on how to qualify for a short sale. This will save you time and effort, allowing you to know if you qualify for a short sale to begin with.

Here are some of the key factors that will make you qualified for a Naperville short sale:

Your home’s market value has decreased.

You can find out the actual market value of your home by consulting a certified Naperville short sale real estate agent for a Comparative Market Analysis (CMA). The agent will arrive at the current value of your home based on the prices of previously sold homes in the area that are comparable with yours, as well as prices of comparable active listings. The current value of your home should be less than your mortgage balance in order for a lender to approve the short sale.

Your mortgage is in or near default status.

There used to be a time when lenders would not approve a short sale if the borrower was current on his or her mortgage payments. Now, it is no longer necessary to be in a position of default or be behind on mortgage payments in order to qualify for a Naperville short sale.

You must have a valid hardship.

One of the requirements you need to submit to your lender is a hardship letter explaining why you can’t continue making your mortgage payments.

Examples of hardships that lenders consider valid are:

• Loss of employment
• Decrease in salary
• Divorce
• Death
• Medical emergency
• Bankruptcy

Examples of hardships that lenders DO NOT consider are:

• Buying another home
• Moving into an apartment
• Unhappy with the neighbors
• Pregnancy
• Bad investment decisions

You have no more assets.

Your lender will ask for your financial records like pay stubs, tax returns, and financial statements and verify your claim of hardship. If the lender finds out that you still have financial assets like money in a savings account, stocks, bonds, IRA accounts, or other property, the lender will not approve your short sale since they will think that you still have resources to pay for your mortgage. If the lender does approve the short sale, you may be asked to pay for the difference in the amount of the mortgage balance and the short sale price.

Every lender will have their own set of guidelines and requirements for short sales, but these are the four basic requirements that most lenders have for borrowers to qualify for a Naperville short sale.

If you need more information about how to do a Naperville short sale, visit www.RyanHillCanHelp.comTalk to me, a Certified Distressed Property Expert and Short Sale Agent, Teresa Ryan at 630-276-7575.  As a Broker/Owner of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville short sale home.

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Teresa Ryan

Broker/Owner, CDPE

Ryan Hill Realty

1288 Rickert Dr Suite 300, Naperville, IL 60540

630-276-7575

TRyan@RyanHillRealty.com

Do I Need to Continue Paying Mortgage During a Naperville Short Sale?

Do I Need to Continue Paying Mortgage During a Naperville Short Sale?

When you consciously or knowingly stop making mortgage payments, this is called a strategic default. Many people believe that a strategic default can accelerate their Naperville short sale, but this is not always true.

Whether or not you continue to make mortgage payments and HOA dues is a personal decision that can only be made by the borrower — not the lender or real estate agent.

To help you make an informed decision, you need to understand both the advantages of continuing your mortgage payments as well as the consequences of late mortgage payments.

Late mortgage payments can negatively impact your credit score and, as a result, can also impact your ability to obtain a loan in the future.

Contrary to popular belief, you don’t have to default on your mortgage payments in order to qualify for a Naperville short sale. The Home Affordable Foreclosure Alternatives (HAFA) program has released new guidelines that allow borrowers who are current on their mortgage payments to do a short sale.

As for HOA dues, unpaid HOA fees can kill your short sale deal. Short sale lenders refuse to pay the seller’s unpaid HOA balance. They will usually contribute a small amount for HOA document and transfer fees, but that’s it. It’s better to continue paying your HOA dues even during a short sale.

There are many advantages if you continue to make your mortgage payments:

1. Protect your credit score.

Being current on your mortgage payments protects your credit score because late payments will not be reflected on your credit report. However, your credit score may still drop by a few points due to a short sale and the lender may still report your Naperville short sale as “settled less than full.”

2. Shorter waiting period for buying another home.

Depending on the type of loan, the waiting period to get a new home loan and buy another home is 2-3 years after the short sale was completed. Fannie Mae and FHA allows short sale sellers to obtain a new loan immediately after a short sale on the condition that the borrower was never late on mortgage payments, which is another advantage of being current on mortgage payments.

3. Cancel without penalty.

In the event that you fail to sell your home as a Naperville short sale or if the lender does not approve the buyer’s offer, you can cancel the listing without liability and keep your home.

4. Peace of mind.

Being current on your mortgage payments will help you sleep better at night and avoid the stigma of being delinquent. Having one less thing to stress about makes it easier to deal with the complicated short sale process.

There are more advantages of being current on mortgage payments during a short sale. Although, there are instances when the homeowner could no longer continue making payments due to financial hardships or extenuating circumstances that are beyond their control.

If you plan on doing a Naperville short sale, make sure to work with an experienced Naperville short sale agent who has your best interests at heart and can help you arrive at an informed decision.

If you are ready to do a Naperville short sale call me, Teresa Ryan at 630-276-7575.  As a certified distressed property expert and Broker/Owner  of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville short sale home.  Visit www.RyanHillCanHelp.com for more information on short sales and foreclosures.

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Teresa Ryan

Broker/Owner, CDPE

Ryan Hill Realty

1288 Rickert Dr Suite 300, Naperville, IL 60540

630-276-7575

TRyan@RyanHillRealty.com

What’s the Difference Between Naperville Short Sales and Foreclosure?

What’s the Difference Between Naperville Short Sales and Foreclosure?

When a homeowner fails to make his or her mortgage payments or becomes delinquent in their payments, the home is foreclosed upon. In a foreclosure, the lender assumes ownership of the home and evicts the delinquent borrower. The lender initiates the sale of the home at a foreclosure auction or a trustee sale.

A short sale is used by distressed homeowners as an alternative to foreclosure. If a homeowner owes more than the current market value of the home, a good option is to do a Naperville short sale. A short sale is initiated by the homeowner, unlike a foreclosure where the home is sold by the lender. In a short sale, the home is sold through a real estate agent specializing in short sales and is sold much like a traditional sale, except short sales involve more paperwork and parties than a traditional real estate transaction. As with any transaction, there are tax implications, please read the rules on www.irs.gov and speak with your lawyer before proceeding.

If the lender approves the short sale, the lender agrees to accept less than what is owed from the proceeds of the sale. In most circumstances, the borrower can walk away debt free — if the lender agrees to waive the difference of the loan balance and the proceeds from the short sale.

Benefits of a Naperville Short Sale Over a Foreclosure

• Impact on Credit Score. – Short sales and foreclosures both have a negative impact on the borrower’s credit score. However, short sales have a comparatively lesser impact on the credit score. A borrower’s credit score may drop from 50-150 points during a short sale and 200-400 points after foreclosure.
• Waiting Period to Buy a New Home – Borrowers have to wait 7 years after foreclosure before they can buy a new property. In a short sale, the borrower may be able to buy a new house at least a year after the short sale depending on the type of loan, the borrower’s eligibility and their unique situation.
• Mention in Future Loan Applications – It is mandatory for a foreclosure to be reported in future loan applications, which could have a negative impact to your loan application. A short sale does not necessarily have to be mentioned in future loan applications, which is more beneficial to borrowers who plan on buying a new property after a short sale.
• HAFA Eligibility – Homeowners who have gone through a short sale can still be eligible for the Home Affordable Foreclosure Alternatives (HAFA) Program, while those who have gone through foreclosures are not eligible for the HAFA program.

Although a short sale and a foreclosure both have a negative impact on one’s credit score, a short sale is still a better option than foreclosure. Short sales offer more advantages for distressed homeowners and help them recover their financial standing faster. If you want to know about Naperville short sales, visit www.RyanHillCanHelp.com.

If you are ready to do a Naperville short sale call me, TeresaRyan at 630-276-7575.  As an owner/broker of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville short sale home.

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Teresa Ryan

Broker/Owner, CDPE

Ryan Hill Realty

1288 Rickert Dr Suite 300, Naperville, IL 60540

630-276-7575

TRyan@RyanHillRealty.com