What you need to know if you have been issued a Lis Pendens

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The What, and Whys of a “Short Sale.” If you're facing foreclosure, you need to read this!

I could never understand what it feels like for a family to lose their home, or deal with the stress of a pending foreclosure, however, I can sympathize with loss.

I know what it's like to lose a father at a young age, I watched my grandmother slowly deteriorate with Parkinsons Disease and my grandfather slowly forget who he is. Raising a family in a home is the American dream, and sometimes life happens, loss of employment, death, sickness; no matter the cause, I want you to know that you don't have to bear that burden alone. I am guilty of this myself, often times we like to forget, sweep all our problems under the rug, but the longer we wait, and ignore the problem, the worse it gets.

 

Short Sale

Short sales are one way for a homeowner to avoid foreclosure, it provides an opportunity for a homeowner to avoid foreclosure, minimizing damages, allowing the homeowner to remove themselves from a burdensome mortgage they can no longer afford.

A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.  A homeowner will have been issues a Lis Pendens, also known as notice of pendency, “lis pendens” is Latin for “suit pending.” In judicial foreclosures, this is a “notice to the world” of a foreclosure action. It is filed with the county clerk .  A Lis Pendens is issue when homeowners have been falling behind on payments and can no longer afford the property,  due to some type of hardship.

The first thing you want to do is call your bank right away, banks may offer some type of loan modification or forbearance programs that would prevent the home from foreclosure.   In many cases homeowners often find themselves months, or even years behind on payments, left with a home they can lo longer afford, and even maintain.  However unfortunate, in many instances a “short sale” is the only remedy to prevent foreclosure.  So what’s the downside if you do nothing, numero uno, you lose your home, and numero dos, your credit score will be reduced by 350 points and will take 7-10 years before it is removed from your credit.  Poor credit is like a silent killer it will affect how, and even where you live, your ability to take out a loan, obtain lines of credit, and even apply for a mortgage in the future.  After a foreclosure is satisfied it will take up to 3 years to obtain an FHA mortgage, as they are the most forgiving, and 7-10 years for a conventional mortgage, if  in fact you qualify at the time.

So what’s the good news, what if the bank was willing to pay you $7,000-$10,000 on a bank authorized short sale?!  Sounds too good to be true right, it isn’t!  

What if there was a way to prevent such a devastating blow to your credit!? Well, that can be remedied with a short sale as well!!

 

What are the requirements?

  • The property must be in pre foreclosure
  • A homeowner must be issued what is know as a Lis Pendens, also known as notice of pendency, “lis pendens” is Latin for “suit pending.” In judicial foreclosures, this is a “notice to the world” of a foreclosure action. It is filed with the county clerk.  If you or someone you know received such a letter from your bank, there is a possibility that if you don’t come to terms with your bank, you will lose your home
  • Must be listed by a realtor
  • Must have a purchase offer
  • Has to be an “Arms Length Transaction”
  • Allows the market to ensure that both parties in the deal are acting in their own        self-interest and are not subject to any pressure or duress from the other party. It also assures third parties that there is no collusion between the buyer and seller.

 

Homeowner Benefits:

  • No up front or out of pocket costs
  • Realtor and Attorney fees paid by the bank
  • Junior lien holders discharged
  • No deficiency judgement or promissory note
  • Shown as “Paid as Agreed” on credit report
  • No mortgage payment required during this process
  • Possible relocation incentive up to $10,000 if primary residence.