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Robert Farmer, SFR, BPOR

Real Estate Investment PRO


AVOIDING FORECLOSURE                           


Today, Short Sales & Foreclosure are a fact of life.

There are things you can do to try and save your home and I would like to provide some suggestions and helpful information based on my own experience and the experience of many others that have fallen into this situation. 


Homeowner Solutions As a homeowner, falling behind on your mortgage payments and dealing with the possibility of foreclosure is an extremely stressful situation. If for whatever reason you are currently behind on your mortgage payments – or foresee that you will soon be unable to continue making your payments – be proactive; you do have options. Quite understandably, many distressed homeowners simply give up and give in to the foreclosure process, often without being fully aware of the options available to them. 


A Short Sale is an agreement with a lender to accept less than the amount owed by a borrower via a sale of the property to a third party. With this agreement, the lender releases the borrower from the mortgage, thereby preventing foreclosure

The key factor in selling a house in short sale is to price the property at the current market value. Your property needs to be priced competitive with other for-sale and foreclosure homes in the area. Asking too much will leave you sitting on a house with no bids, wondering what happened. Asking for too little will raise the ire of your lender/bank.

Once a realistic offer is made, we will submit the short sale package to the lender/lenders for them to approve the deal. This is a crucial step that requires high precision- even one piece of paper out of place in short sale package can result in a no-deal and big waste of time. Lenders have limited time to work through these packages; that is why if there’s something wrong, they’re likely to just put you back at the bottom of the pile.



  • Our services are FREE to homeowners
  • Sophisticated financial knowledge
  • Understand the lender's language
  • Reliable
  • Accurate paperwork
  • Experience
  • Strong supprtive administration
  • High success rate
  • Strong relationships with lenders
  • Avoid the time and frustration of touch negotiations with lenders



Forbearance A forbearance agreement is made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her payments. A forbearance agreement is not a long-term solution for delinquent borrowers; it is designed for borrowers who have temporary financial problems caused by unforeseen problems such as temporary unemployment or health problems.

PRO: You remain in your home. A temporary reduced or suspended payment provides time needed to save money, pay off other bills, find employment or additional employment, or recover from injury or illness. CON:At the end of the forbearance period, your payment will be higher due to the past due amounts owed. Your mortgage payments could be 20% - 25% higher for a period of 1-year or more.

Short Sale A short sale, also called "Short Pay" or "Pay Off", is a transaction that allows for the sale of a property for an amount that is less than the amount that is owed to the lender. The bank in return may accept the proceeds as full settlement of the debt.

PRO:Under the terms of a short sale, your lender may forgive your mortgage debt in its entirety according to the terms outlined in The Mortgage Debt Relief Act of 2007. Fannie Mae has announced a reduced mandatory waiting period to establish credit history to 2 years after the completion of a short sale. This mandatory waiting period after a short sale is lower than the required 5-7 years following a foreclosure.

CON: You must sell your home.

Deed-in-lieu of foreclosure

If you are unable to bring your loan current or sell your home in a reasonable amount of time, your lender may agree to have you voluntarily transfer the deed to the property to them to help avoid the impact of a foreclosure on your credit rating.  PRO: By voluntarily transferring the deed, you save your lender tens-of-thousands of dollars in foreclosure proceedings. If you are willing to do this, Fannie Mae has reduced the mandatory waiting period to establish credit history to a minimum of 4 years. This mandatory waiting period after a deed-in-lieu of foreclosure is lower than the required 5-7 years following a foreclosure. CON: Although a deed-in-lieu of foreclosure may have less impact than an actual foreclosure on your ability to establish homeownership in the future, if you are going to cooperate with your lender and take a proactive approach, a short sale is generally the better option.


Selling more homes in East Windsor, Hightstown, West Windsor, Princeton, Hamilton, Lawrence and Trenton areas than anyone.  Check out my home selling strategies on the sellers page!

7 Tips for Short Sale Success

 Have to sell your home for less than it’s worth? Our seven tips will help you get the best price. 1. Know who you owe A short sale has to be approved by any company that has a mortgage or lien against your home. That includes your first, second, or even third mortgage lender, your home equity line lender; your homeowners or condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking to everyone early in the process. Ask what documents they’ll need from you. 2. Pick your short sale team You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three, and listen carefully for signs that they understand the complexities of the short sale process. Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample short-sale package or for an example of a prior short-sale success. 3. Get your documents ready Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what you owe as well as copies of your federal income tax returns for the past two years. 4. Expect delays Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan modification program must respond to short-sale offers within 10 days, it may take weeks or months for your lender to decide whether to allow you to sell your home in a short sale--and even longer if you must negotiate with more than one lender or lienholder. Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a counteroffer, which can create further delays. 5. Anticipate demands Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete? 6. Know the tax implications Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask if you’ll be required to report amounts “forgiven” by other lienholders, if applicable. 7. Consider how the short sale will affect your credit and what you must pay Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt forgiven may negatively affect your credit score, but a short sale typically damages your score less than a foreclosure or bankruptcy. Ask you lawyer whether you'll be responsible for paying back the lenders' loss. If the lender says it will forgive any losses on the sale of your home, get that promise in writing.

Short Sales Get Government Incentives

HAFA - The Home Affordable Foreclosure Alternatives

Although short sales are not hassle-free, at least you've got the government backing you with the Home Affordable Foreclosure Alternatives program provides financial incentives for lenders and borrowers to avoid foreclosure through short sales or deeds in lieu of foreclosures.


Participation in the HAFA program requires adherence to guidelines--including a standard process and minimum timeframes--that speed the process, says Dallas-based REALTOR® Tom Branch, co-author of Avoiding Foreclosure: The Field Guide to Short Sales. The HAFA program is for homeowners who can't keep their homes with the help of a loan modification.  


Advantages of a short sale


<>···You can receive up to $3,000 from your lender for moving expenses at the time of closing of a HAFA short sale or a HAFA deed in lieu of foreclosure. Relocation funds are part of the incentives of HAFA, but not necessarily for other short sale or deed in lieu programs of the lenders. 


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