Short Sale Symptoms

A short sale is when the Lender will accept less the existing mortgage owed based on hardship. Hardship doesn't mean you owe or own a Mercedes, have a 401(k) plan still in existence, own a few Rembrandt paintings, you catch the drift. All kidding aside, as we need some sense of humor in this difficult time of financial crisis, what I just mentioned is true and people who have alot of assets can't all of a sudden hide them or forget them, thinking, nobody would know, when in fact they do know.



As I reviewed a list of two to four flats in one zip code in the City of Chicago last night, I was blown away by the information that I saw and approximately 400 more properties will qualify shortly as a short sale in Chicago or a foreclosure.



What happened? The Mortgage Brokers and Banks allowed for expanded ratios under a stated program and those programs were out there, but no longer are because of the mess some of these programs have created. It just wasn't the programs, it was our own desire to keep up with our friends and pretend we had the money to spend when we actually didn't have it. Pretending to me, is defined as, if you can't pay cash for it, then you have no business doing it, buying it or enjoying it! Yet, there are those who have been responsible but have fallen behind because of a loss or losses of a job, major health problems within the family unit that has really taxed the financial stability of the home. Parents try to stretch the life out of their childrens shoes, who don't eat so that there children have a meal in front of them, who work three jobs to try to keep up with the outragious medical costs and expenses that consume every last penny that you bring home.



Then there is the closing - when you purchased your home. Maybe there was a credit for repairs to the home that actually went towards your closing costs. Or the issues of fraud where the price of the property was increased for "under the table cash back" from the seller. The value of the property was falsified, possibly, to support that false sale price which all it did was increase the property values when that was not the true sale price! Ah, let me go back to the fraud issue for a moment. Yes, it did and still is happening. Recently, I had a file where the attorneys said a check would work for the buyer (but it wouldn't be disclosed on the HUD - btw, which is fraud and a "no, no"! ) from the seller on a deal with little or no money down. What you, the consumer may or may not know is that, you cannot get back more money then what you are putting down on the house and right now if the property you are buying is in an area where the market trend is on a downward scale, then the lender may ask for an additional 5% downpayment or may reduce the price by an adjusted 5% to make sure that they have a secured loan, versus the 100% financing or 3% down payment products. Oh, the 100% and 3% financing programs are still out there but under the FHA or VA programs, but that is it!



So, a short sale can happen to anyone. Take Ed McMann (Johnny Carsons side kick) for instance, he broke or hurt his back and hasn't been able to do any commercials for 18 months and the lender has started proceedings against him because he is in default. This is a man that is up there in years - who is supposed to be enjoying his life and instead, because of an accident, it is effecting him.



I was amazed at the conventional adjustable mortages that are out there with an equity line right behind it for a good portion of homes. That's another sympton.



The negative amortization program - I saw 10 properties on that list of 400 that have gthe 1.25% interest rate tacked right behind the mortgage amount and lender's name.



Then there are those who were in trouble just because of spending habits and kept taking the equity out of their homes and there are certain lenders in the C or D Paper that pop up all over saying "this homeowner is so far in debt up to his ears that we can charge him 10 or 11% on his mortgage until he can prove that he is responsible. "

Know this, that there are answers to these problems but the answers to resolve do take time and it is like working a puzzle, piece by piece. Don't fall for the "bankruptcy can save you" story until all options are resolved. There are a lot of different avenues that can be pursued even before a short sale. I know it is difficult and how can anybody understand what you are going through! You are angry, hurt, feel betrayed, scared to go home to find out what is next, or just plain want to give up.

Focus on resolution to the problem. Not the whole problem but take it piece by piece and take control of your life by asking questions. You are not the only one in the boat! You'd be surprised how many people are struggling out there.

Have a question? Need Answers? Ask away. Do not think of your questions are dumb because the only dumb question, is the one not asked!

Reach out to us at 773.564.4268 or email us at shortsalesymptoms@gmail.com