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Examples Of Short Sale Financial Hardship Letters

helpYes, we can help! Short sales are increasingly common as new government acts have passed to find alternatives to foreclosures.  You are not alone.  The economy is tough in Boulder Colorado and elsewhere;  people are losing jobs and it’s been a difficult time in real estate as property values have dropped below mortgages owed on homes.  This makes it difficult to refinance and when it’s hard to pay on that mortgage, you find yourself in a dire situation.  Often times if you qualify, a short sale is a better solution that foreclosing.  It’s not as hurtful to your credit and the bank is willing to accept a payment lower that the borrowed amount in order to avoid foreclosure costs.  The Troia Team has written many blogs on the topic so if you feel you are a candidate for a short sale, let us know.  We can help.   Because we have covered the positives to a short sale and explained the process in detail, I wanted to use this blog to provide examples of short sale hardship letters.  These are necessary to submit to a lender when simultaneously submitting the other necessary documents that go along with a short sale request to the bank.  Click here for hardship letter examples.

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What You Need To Know About A Short Sale

ShortSaleWhat is it when a seller’s lender agrees to accept a lower amount for a property than is owed? 

Yes…a short sale

This is big real estate news in Boulder Colorado and throughout the country.  If the owner of a home has an outstanding loan/lien that is greater than the value of the home and they are in financial distress (late on mortgage payments), then a short sale is an option other than foreclosure.  Click here to read all about  it. Read the rest of this entry »

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Foreclosure Verses A Short Sale

house short saleA short sale is when the real estate sale proceeds fall short of the balanced owed on the property’s loan.  This happens when the borrower is unable to pay their  property’s mortgage.  Instead of penalizing the mortgagor, the lender agrees to sell the property at a moderate loss.   This is an advantage to both parties as  it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. Clients in Boulder ask this all the time and no,  this may not release the mortgagor from their deficiency. Neither foreclosure nor a short sale leaves you free and clear.

real-estate-investment-property-foreclosure-reoDefinition made simple of foreclosure: when the borrower is legally removed as owner to their home.  Ownership is terminated due to late payments (default).  The property is sold at a public auction.  Proceeds go to payment of the balance.  When the bank buys the property at the auction, it is then put on the market.

If it’s right for your situation, a short sale would occur before the home goes to auction.  A Realtor lists the home in hopes of selling and presenting an offer to the bank before the sale date.  This date can be extended while the home is listed.  Two basic scenarios: 1) Home receives an offer and the bank accepts = no foreclosure. 2) Property receives no offers or the bank rejects offers = home goes to auction & foreclosure.

Enough of the definitions already!  Let’s talk about the pros and cons of each. Read the rest of this entry »

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New Family Cabon Monoxide Saftey Act in Colorado

fearwomanbehindglassMy friend is always asking me to “check” my carbon monoxide detector in my house and I said “I do”! The simple answer is,  I look over to see that the red light is still on and that no one is sick yet! Sounds a bit frivolous, but I don’t remember having a carbon monoxide detector in my house when I was little, more less when my kids were little. Any of this sound familiar to you? The scary part is that you usually hear on the news during the winter time about some poor family that perished because of carbon monoxide poisoning and they never realized what hit them.   Colorado’s  Gov. Ritter Jr. signed a new bill May 2009 that requires all existing single and multi family dwellings offered for sale or transfer (after July 1, 2009) to have carbon monoxide detectors. Read the rest of this entry »


Avoid Foreclosure and Foreclosure Scams

Did you know that foreclosure is not the only option to help homeowners struggling to make payments.   The Federal Trade Commission outlines the following options: 

  • Reinstatement – the borrower pays the entire past due balance plus late fees and penalties by an agreed upon date. Paying Bills
  • Repayment Plan – the lender gives the borrower a fixed amount of time to repay past due payments by adding a portion to the regular payments.
  • Forbearance – mortgage payments are reduced or suspended for an agreed upon period of time.  At the end of that time, the borrower resumes regular payments plus a lump sum or partial payments for a number of months to bring the loan current.
  • Loan Modification – the borrower and lender agree to permanently change one or more terms of the mortgage contract to make payments more manageable.  Modifications could include lowering the interest rate, extending the term of the loan, or adding missed payments to the principal.  Some lenders may forgive a portion of the debt under the Mortgage Forgiveness Debt Relief Act of 2007.  Check with a tax expert regarding reporting or excluding the income.
  • Sale – the homeowner sells the property and pays off the debt.  Some lenders may postpone foreclosure if there’s a pending sales contract or if they know the home is being listed for sale.
  • Short Sale – the lender allows a property to be sold for less than the existing loan balance.  A short sale is really a form of  pre-foreclosure and occurs when the lien holder agrees to accept less than the loan amount to avoid the foreclosure process.
  • Deed-in-Lieu – with the lenders agreement the homeowner voluntarily transfers property title to the lender in exchange for cancellation of the remainder of the debt.  Although the homeowner loses the home and equity, this process is less damaging to the borrower’s credit than a foreclosure.

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Stimulus or Depressant – What Do You Think?

We have all been reading and hearing about all the bail out bills and the latest $75 billion to aid homeowners at risk of losing their homes.

I found this clip on CNBC which is entertaining and might be right on.   Watch and tell me how you feel.   See Rick Santelli take down Cramer!


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10 Ways To Better Sex In Boulder Colorado!

Hot Dog Blog PicYes I know…what a deceptive way to attract readers to my Boulder real estate blog but how else do you dress up the process of obtaining an FHA/VA loan in a smooth manner?  In Part I of my blog, Uncle Sam Passes Housing Stimulus Bill , I summarized what the new FHA reform laws mean for all of us when purchasing Boulder real estate using a government loan. 

In Part II, I am recommending 10 steps you can take to help ensure your FHA/VA mortgage experience is VERY satisfying.  Now it may not be as satisfying as sex for most you Read the rest of this entry »

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Uncle Sam Passes Housing Stimulu$ Bill

Uncle Sam

The Housing and Economic Recovery Act of 2008 was made official on July 30, 2008.  This housing stimulus bill passed the House and Senate by overwhelming numbers and President Bush was quick to follow suit.  Hopefully these changes will help jump start the slumping housing market but some feel it is too little too late.  Regardless, there are still many home buyers who need affordable homes and FHA financing is one of the most popular means to obtain a mortgage loan.

If you are wondering what an FHA loan is it is a loan insured by the Federal Housing Administration (FHA) and made by an approved lender in accordance with the FHA’s regulations.  FHA requires that the property being purchased meets certain minimum standards.  This mortgage may be easier to qualify for than a conventional mortgage, but it also has a lower maximum loan limit that varies depending on the average cost of housing in a given region.  FHA loans require the borrower to pay mortgage insurance premiums (MIP) if the down payment is less than 20%.  Fixed and adjustable rates are available with FHA loans.

If you are considering an FHA loan, please remember FHA loans do take longer to process than conventional loans and the current average days to close is 35+ days.  Also, FHA inspectors are more finicky when it comes appraisal time and there may be two inspections required for the property.  This may be an important factor if you plan to buy a bank owned property which may have one or more inspection issues which could define if the property is considered habitable.

What does this mean for you if you plan to obtain FHA financing?  Read the rest of this entry »

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Don’t Let the Cat out of the bag

cat-in-bag.jpgWhen purchasing a home it is very important to have the home inspected for possible issues that might come up in the future. Many people do not realize the importance of a home inspection until it is too late.  But there are other reasons to have a home inspection done especially when you are dealing with REO or Foreclosure properties or properties that are being sold “as is”.   Read the rest of this entry »


How to haggle with the bank

used car salesmanIf you are purchasing property these days I’m sure that you have stumbled upon a REO or lender owned/ bank owned property in you’re searching.  Here are a few tips for placing an offer on a REO/Bank owned/ Lender owned property. Read the rest of this entry »


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