We have been through hundreds of negotiations like this, and we have learned that there are more than a few steps to take before we can finally receive that approval letter. None of those steps suddenly enable you to jump from A to Z right away. You simply have to learn what you’re dealing with so you can know how to manage the process more effectively.

If you want to be successful at negotiating short sales, it’s really all about understanding what lenders are thinking during those negotiations. They’re thinking about which course of action will cost them the least amount of money. If they see any way to collect that debt, they will do it. If they see any need to avoid a long-term bad debt, they will generally move in that direction. Lenders know how much it costs to continue to collect debts and maintain REOs. They know exactly how much money they lose when they have to take possession of a foreclosed property.

There’s no baloney about achieving real success in a short sale negotiation. Here are my ten best tips for making the most of your deal.

1) Submit a complete short sale package and make sure it gets assigned to a mitigator quickly. If it doesn’t get assigned, the offer will never be seen. Make sure to follow up and see if the lender has received your offer. Lenders lose short sale packages all the time or claim they never received them. Don’t let this happen to you.

2) Don’t give up. With all the foreclosures being processed lately, the loss mitigation departments are swamped. Pleasant persistence is the only way to get past this roadblock. If you don’t find the information you need, call them back once every two or three days until you do. You don’t have to be a pest and leave a message every time you call. Just say “thank you” and call them again another day.

3) When you find out who is handling your short sale package, ask them who owns the loan. I guarantee this will make your negotiations go more smoothly. Once you know whether the loan is a VA, FHA, Fannie, or Freddie loan, you can know exactly what their negotiation limits are.

4) Pleasantly explain your offer to the loss mitigator and push to have the lender order a new interior appraisal or BPO immediately.

5) Conduct an effective BPO.

6) Pull a title report after the BPO is done so you can resolve any outstanding issues before the closing.

7) Don’t be shy about asking the loss mitigator about the BPO number. You might get an answer, and you might not. If you do find out, count on paying 90 percent of that number.
If the lender refuses to disclose the BPO, you need to ask for a counteroffer. (When they make their counteroffer, this is usually equal to the amount of the BPO anyway.)

9) When you submit your counteroffer, include additional documentation to back up the amount you’re offering. You can use repair estimates, low comps, negative news reports about the neighborhood, and even the MLS listing itself, which shows how many days the house has been on the market.

10) Remind the loss mitigator that you can close quickly with cash.

You don’t need special tricks, and you don’t need a buddy in every loss mitigation department. You just need to realize that you can use the leverage from the fact that a short sale is generally better than a foreclosure in the eyes of a mortgage lender. Your job is to make them a sensible offer that will help them unload a problem property with the least amount of expense. Focus on what they need, and you’re on your way to getting what you need.

Want to learn more about conducting a short sale negotiation? Check out the Strategic Real Estate Coach website and treat yourself to the most current information on loss mitigation in America!

Let’s face it, as easy as it may seem to just walk away from a home, the haunt of a foreclosure goes on for years to come affecting credit and even employment, in some cases. Many people are not aware that foreclosure even can affect their security clearance levels and future employment. Foreclosure is certainly not the best option, particularly with the advent of HAFA and other alternatives.

Hiding your head in the sand (ostrich mode) is not the answer. It is well worth the time invested to investigate your options, particularly in light of HAFA, which among many other things, provides monetary relocation assistance and eliminates the hovering concern over deficiency judgments when a short payoff has been negotiated.

One of my passions is to inform the public about their options to avoid foreclosure. I setup my Phoenix real estate “Home Rescue Network” website to do just that. Distressed homeowners who have negative equity or who are behind on their mortgage need to take the time to educate themselves. There is a comprehensive list of options to avoid foreclosure available on the site and a questionnaire to help determine eligibility for the new government programs.

With our National network of top agents around the country, we’re able to refer homeowners to the experts in their area to further educate and help them rescue their homes from the black hole of foreclosure. Homeowners or Agents who would like more information can contact me directly.

Simplifying and streamlining the use of Short Sales will be the result using HAFA’s top features including:

1. Providing incentives (financial) to borrowers, servicers AND investors

2. Elimination of deficiency judgments by requiring servicers to release borrowers of future liability

3. Standardized processes, documents and timeframes will be used to streamline and standardize the short sale process

4. HAMP eligible borrowers will have workable alternatives complementing HAMP

5. Financial and hardship information collected in HAMP will require no additional analysis on eligibility in HAFA

6. The homeowner will be allowed to receive pre-approved short payoff terms prior to the listing of the property

With over 11,000,000 homeowners in negative equity positions on their mortgages (that’s roughly 24% of all properties with a mortgage), I look forward to seeing what HAFA will be able to do to help borrowers avoid foreclosure and how the goals of HAFA to standardize the process flow, minimize the performance timelines and standardize documentation of short sales will play out.

Learn more about Foreclosure Avoidance Options. Stop by Joe Martin’s site where you can find out all about HAFA and Avoiding Foreclosure and what your options are.

Maybe you already have an idea of what might happen in foreclosure, especially if you know someone who has already been there. Most people don’t realize they have more options than to stay or leave. Moving away might be a temporary solution, but there’s more to it than just giving the house back to the bank. How will the foreclosure affect your credit? Will you even be able to buy a car after this is over?

No matter whether you’re the homeowner or someone who works with homeowners in foreclosure, you should be aware of all the options in this situation. If you’re the homeowner, it is best to understand everything you can about the foreclosure process. If you’re someone who works with homeowners, it’s your job to help that homeowner understand their options during this difficult time. It helps if everyone has a realistic view of what could happen and why.

Two of the options have been covered frequently in the media lately: deed-in-lieu and loan modifications.

When homeowners agree to a deed-in-lieu, they voluntarily give up their home. The bank is spared the time and cost of going through with the foreclosure, but the homeowner’s credit is damaged just the same.

What about loan modifications? The government’s Home Affordable Modification Program (HAMP) promotes mortgage loan modifications as being a viable way to deal with the foreclosure crisis. Yet the current rate of success for those loans to go from trial to permanent modification is 4 percent. Using California as an example, roughly 140,000 trial loans have entered into the modification process; however, only 5,600 loans will be modified based on their current success rate (4 percent). California filed over 450,000 notices of default for 2009. Those being helped are few and far between given the current numbers.

There are four more successful options.

1) Live in the house until eviction, and let the bankruptcy system hold off the foreclosure until the auction date. It won’t make the foreclosure go away, but it will help the homeowner save money temporarily.

2) List the house for the amount of the debt and hope someone comes along who loves the house so much that they will pay your asking price before the auction date. You can dream all you want, but the odds are that nobody will pay more than the house is worth, and you’ll end up going back to option one.

3) The homeowner can list the property with a real estate agent who is willing to wait out the short sale process and encourage buyers to do the same in order to get a discount on the property. The buyer may get a great deal on the house, and the real estate agent may still get credit for the sale, but it doesn’t always work that way.

The agent can run into a roadblock when the buyer says they need a home right away. Most short sales can’t be completed in less than 60 days.

If the real estate agent or the seller isn’t familiar with negotiating a short sale, other problems can arise during the negotiation process. Banks have entire loss mitigation departments staffed with people who are trained in collecting mortgage debt, and they have no problem taking advantage of homeowners who don’t understand the system.

I’ll give you an example. Did you know that deficiency judgments and post-sale promissory notes can be avoided in some cases? You can know the basics of how the process is supposed to work, but shouldn’t you learn how to work the process? Wouldn’t that alone be worth it?

4) The fourth option is to put the home up for sale with a real estate agent who is willing to work with an investor as the buyer. A well-educated investor would use the right contracts and the lender’s forms to obtain approval for a short sale while still guaranteeing the real estate agent’s commission. The investor would then own the house to keep, rent, or sell, and the homeowners could move on with their lives.

Why should the homeowner work with an independent short sale investor? People who negotiate short sales every day know the best ways to get the best deal for the homeowner. For instance, the BPO process is more than just having an appraiser stop by. An experienced investor will know how to handle the situation to the homeowner’s benefit.

Every real estate agent who works with homeowners who are threatened with foreclosure should know these four options. Homeowners can file bankruptcy and stay until the auction, sell the property for the amount due on the mortgage, ask the lender to approve a short sale and hope a buyer will wait for that to happen with them, or apply for a short sale with an investor waiting to become the buyer.

My partners at Strategic Real Estate Coach specialize in educating people about short sale solutions for homeowners in trouble. We offer a free Silver Membership in the coaching program, and the benefits include several reports to help you learn everything you need to succeed!

To get more in-depth coverage of the legal issues you might face, take a look at the blog on topshortsalelawyer.com. Attorney Jeff Watson is great at explaining the issues for short sale investors.

When you help people learn the truth about foreclosure and how to avoid it, you give them a chance to overcome one of the most difficult times in their lives. Educate each homeowner about their options, and watch them turn a bad situation into a fresh start.

Need to know more about foreclosure options? Get free information from our real estate coaching website! You can get a unique content version of this article from the Uber Article Directory.

First off, contact your mortgage company. Most, if not all, mortgage companies have a Mitigation or Loss Mitigation department. This is the department you need to contact. Let them know everything that is going on. You, likely, will need to show proof of financial stability or instability.

The mortgage industry is well backed, enough that they can help in rough situations. After all, they can still take and sell your home. One of the most common approaches that mortgage companies take is offering forbearance. Forbearance allows you to payback what you have missed over a certain period of time.

However, there are many other options available. Dependent upon your history and particular situation mortgage companies will allow you to do anything from take out another loan to adding the existing past due amount onto your existing loan. In certain situations you may find they are even willing to waive a missed payment. Remember, you do not get to pick. This is all based off of predetermined criteria.

As crazy as this may sound, some people up and leave a home that they are in fear of losing. This is one of the worst things you can do. Unless you are forced out of your home, do not leave. Your physical presence, in your house, just might save your home. It is much easier to qualify for assistance when you actually live at the property in question. Assistance is offered by different counseling agencies; look into the ones around you.

If you have gotten to the point where your mortgage company has already filed a Notice of Default you have lost some of your options. Calling them, at this point, probably will not do any good. You could consider selling your house to pay off the loan. You will have to sell at a low price, but sometimes that is what it takes to save your credit.

If your situation has gotten this far, there are a couple other options. However, other options will harm your credit just as bad as a foreclosure will. Just keep in mind that there are different roads to take. The more proactive you are with your mortgage company, the better chance you have. If you want to avoid foreclosure, call your mortgage company as soon as you see you might be facing a late payment. This proactive action will save you a ton of grief in the end.

Learn how to avoid foreclosure by using short sales. Head online today and you can learn how a short sale will help you out.

Shortsale: What is it?

If you own real property and you owe more on your mortgage then the home would appraise for and you have a hardship, then you may be able to short sale your property. A short sale is when the lender is willing to accept less than the full amount you owe.

In order for your lender to consider this option the following must apply: Property must be listed with a realtor and must have a contract based on the comparables in the area the property is located. Owner must have a financial hardship. A financial hardship could occur from divorce, loss of job, pay cut, illness, accident. etc. Owner’s expenses exceed their income, this is considered a hardship. Expenses must be legitimate expenses. One cannot have a $400 dollar a month clothes shopping addiction. Real expenses including; electric, water, rent, insurance, car payments, gas, groceries, homeowner association dues, health insurance, etc.

Once a financial hardship has been established on behalf of the owner, These required documents that must be submitted to your lender: 1. Bank Statements – Last two months 2. Pay Stubs – Last two pay periods 3. Tax returns for 2008 and 2007 4. W’2s for 2008 and 2007 5. Financial Worksheet

Your realtor will provide the following in order to submit to the lender: 1. Listing Agreement 2. Comparables ( active/pending/sold) 3. Listing History 4. Contract offer ( The accepted sales price, should be on or around the current market value) If the contract offer is not acceptable, then the agents should leave the short sale addendum un marked on #5, to allow additional offers to be submitted. But if the original offer submitted is sufficient, this clause should be eliminated.

The following will be provided by the Title company: 1. Title search 2. Preliminary Hud 3. Complete Lien search, including: Code Enforcement, Open Permit and Water balance search.

We highly recommend that a title search and lien search be completed on the property being sold in order to make sure that there are no judgments, liens other than the existing first or second mortgage. If a title search is not completed and a Preliminary HUD -1 Closing Statement is submitted to the lender, which does not reflect other items such as: Code Enforcement liens, Outstanding Water Balances, Open Permits, HOA Liens, Certified Judgments, delinquent real estate taxes, you can get your approval. However, once you have completed your title search and lien search and they show any of the items above, at that point you have to re-negotiate with the lender. In some cases you will not be able to re-negotiate with the lender, so now you have wasted time and energy and you no longer have a deal.

Important Items to consider regarding a short sale: Most lenders are not paying the entire amount owed fpr HOA assesments. They are comparing a short sale to a foreclosure in these cases. If a lender proceeds to the foreclosure sale, the lender is, under law, only required to pay a certain portion of the back assessments. This is the rule of thumb to go by, if the property is a condominium, the lender will pay up to 6 months in back assessments, if the property is a single family home, then the lender will pay up to 1 % of the original balance of their mortgage or 12 months of back assessments. Attorney fees are not considered, nor paid for by the lender. In most cases, the HOA will reduce the amount owed to them. However, some HOA’s are taking a stance that they will not accept what the lender is offering and they will kill the deal. Most lenders will only accept individual buyers. Most lenders do not allow; Corporations, LLC, LLP, Land Trust, Trust etc. The property must be purchased by an individual person(s). Not all companies who say they can negotiate a short sale are qualified to do so. Negotiating a short sale or even a loan modification requires a background and experience in mortgage, title and real estate. Most short sale negotiators who have a background in title insurance, mortgage, or even real estate have a better idea of the entire process and what is involved in all areas of the short sale transaction. Lenders do not have to approve a short sale, even if there is a hardship; however, most lenders are trying to accommodate the owner to some degree. Lenders will definitely deny owners short sale if they feel there is not a legitimate hardship. Second Mortgage Lenders are asking for 10% of the principal balance.

GETTING THE SHORT SALE APPROVAL LETTER FROM THE LENDER IS NOT HARD. PUTTING ALL THE PIECES OF THE PUZZLE TOGETHER: PRICELESS!

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Past week I received a question from one person worried to receive an Eviction Notice:

“If you live in a house and are losing it , have been living in it for 6 months paying no mortgage, will they just show up at our door and say ok you have to leave? or will we get some kind of 30 notice to leave?”

Response: An EVICTION NOTICE SIGNED BY A JUDGE FROM COURT must be shown in order to legally take you out from your home. Nobody can do this without this notice. Check your Eviction Laws, though, because every state is different, so you need to understand it very well. You can go to foreclosurelaw.org to find the legal rules for your case. Check also if your state is a JUDICIAL or NON-JUDICIAL system as this is very important to know.

To understand the EVICTION PROCESS, you need to learn the following common points (although every state is different, and using different names for every point):

1.- DEFAULT: This period is between the first 30 days to 90 days being late in the payment of your mortgage.

2. Notice of Default (NOD).- At 90 days late, you will receive a Notice of Default from the lender, asking for the payment or your house will be foreclosed.

3.- NOTICE OF SALE: Generally at 120 days late on your mortgage, a Notice of Sale will arrive at your home from a lawyer or a trustee telling you what day and what place will be the auction of your home. You still have the option to negotiate your situation.

4. Foreclosure (FC).- After (generally) 2 months of the NOS, the foreclosure sale will be made. Some states take more months for this. (you can stay free at the property)

5. Reinstatement.- After the FC sale, there is a period of REINSTATEMENT, where you can apply to stay more in your property with the reason to find a mortgage that qualifies you to repurchase the property. (It is in around 50% of the states)

6.- EVICTION.- MUST BE AN OFFICIAL NOTICE FOR THIS. When the property is already sold, or the Reinstatement Period is over, you will be contacted by the new owner or a representative. They may offer you CASH FOR KEY if you leave the property the next couple of weeks (or more) in good conditions. If you didn?t leave after 30 or 45 days, the new owner MUST FILE A COMPLAINT IN COURT, to start the Eviction Process and get you out from the property under the eviction laws. Then, you will receive an EVICTION NOTICE from a Judge, stating that if you dont leave on a DETERMINED DATE, the sheriff will go to the property to take you and your family out of the property and lock the doors. You will not be able to take out your belongings after that.

Don’t forget you have legal rights. Homeowners can stay rent free into their home until receiving an official notice from court. See your eviction laws.

NOT EVEN A SHERIFF CAN TAKE ANY HOMEOWNER OUT FROM HIS HOME WITHOUT THIS NOTICE FROM COURT.

Many states allow homeowners to stay legally free at least six months without making mortgage payments. Other states allow up 18 months. See your state laws.

My suggestion is that YOU NEED TO LEARN HOW TO AVOID FORECLOSURE. You definitely can do it by yourself. Don?t be scammed by companies doing this for you.

Specifications: You have to understand I?m not an accountant, or a lawyer, or a tax analyst giving you tax, financial or legal advice. These suggestions are not a substitution for the outlook of a knowledgeable attorney. Nevertheless I?m a Financial Instructor in Arizona doing Business Coaching, Marketing Coaching, Real Estate investments, Credit Repair, Foreclosure Prevention, Residential and Commercial Loans, Mortgage Training and Origination since 2002, I dont declare Im giving legal guidance in this piece of writing to your exact circumstances. This writing was created to inform homeowners in mortgage stress. This writing should be not interpreted to be legal advice for your own conditions. This writing is only for individual information. Under no conditions this article should be understood as a legal advice to market, purchase or keep any house.