SHORT SALES
Frequently Asked Questions
Frequently Asked Questions
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Shortsale Resources & Terminology
THE FORECLOSURE PROCESS
Borrower misses payment(s)
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Lender attempts to contact borrower
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Lender sends Notice of Default (NOD), officially starting the foreclosure process
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If borrower does not reinstate loan within required amount of time, notice of Sale is
recorded and published.
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Foreclosure Sale is conducted and published.
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If unsold to another party, ownership of property is involuntarily transferred to lender.
The property is now Real Estate Owned (REO)
TERMINOLOGY
There are a number of related words and acronyms that are sometimes used incorrectly. Here are a number of terms and definitions to explain the process a bit clearer:
Pre-Foreclosure - This is the period beginning with the initial mortgage default (late payment) up to when the distressed property is sold. The length of this Pre-Foreclosure period varies, depending on State Law. In Arizona, the Notice of Default starts on day 91 from the first late payment.
Notice of Default (aka "NOD") - Official notice from the lender that the borrower has defaulted on the mortgage. The NOD formally begins the foreclosure process and also outlines the reinstatement period.
Reinstatement Period - This is the time stipulated in the NOD in which the borrower may reinstate the loan. Reinstate requires the borrower to bring their account into good standing by making all required late payments.
Short Sale - a short sale is a situation in which a seller (1) Owes more money on the loan (or more than one loan or lien) than the sale of the property will likely produce on the market, and, (2) Is unable or unwilling to bring money to closing.
Notice of Sale - If, after receiving the Notice of Default, the borrower does not or is unable to reinstate the loan, a notice of sale is recorded. the Notice of Sale explains when and where the foreclosure sale will be held. In Arizona, this sale takes place on the Court House steps.
Foreclosure Sale - Also known as a Sheriff's Auction, Sheriff's Sale or Trustee Sale, this is when the property is auctioned for sale to the highest bidder.
Redemption Period - This is the time given to a distressed who the right to redeem real estate after the foreclosure sale. Redemption typically requires that the owner pay the sale price, interest, and other costs. Not all States provide redemption periods.
REO - An acronym for Real Estate Owned, REO is the status of the property does not sell at the Foreclosure Sale and the property transfers back involuntarily back to the lender.
OTHER AVAILABLE RESOURCES FOR INFORMED DECISION MAKING:
MakingHomesAffordable.gov
EFannieMae.com and click Here to see if your loan is owned by Fannie Mae.
FreddieMac.com and click Here to see if your loan is owned by Freddie Mac.
HAFA - Home Affordable Foreclosure Alternatives Program see Informational Brochure from Realtor.org
Mortgage Forgiveness Debt Relief Act of 2007 - IRS website
Call 888-995-HOPE - HUD-approved housing counselors will help you understand your options at no cost to you.
Contact Us for confidential and professional short sale real estate services and for your no-cost access to "10 Steps to Get your Short Sale Started." There is no obligation to obtain more information specific to your particular needs and situation.
