There are a lot of questions in the Massachusetts short sale process so we have tried to answer some of them below. For a more in depth discussion call Maryann at 978-384-0032
How long does a Massachusetts short sale take?
This depends. If you have one lien which is Freddie/Fannie, or a mortgage backed security from submission of a full short sale package to their response is usually 60 days or under.
If it’s an FHA loan, it will take longer, sometimes up to 6 months.
VA loans are somewhere in the middle of 60-120 days.
Does my property have to be on MLS in Massachusetts?
Yes, in most cases your Massachusetts short sale property must be on MLS. Some investors require a 5-15 day listing time minimum.
Does my buyer have to do inspections before Massachusetts short sale approval?
Yes. Your buyer should do inspections before your purchase contract is signed. IF you find major issues during inspection, the purchase price will be negotiated. Your inspection will help the seller’s lender see why your offer is substantiated. Please allow the seller’s lender a chance to review the inspection with your purchase contract.
What does subject to 3rd party approval mean?
This means the entire sale is contingent upon the seller’s lender approving the sale. Each lien holder on title must agree to release their lien at bare minimum for the sale to move forward.
Why does the buyer have to pay things traditionally the seller pays?
In most cases the seller is insolvent. The seller does not have money to fix the property, hence, SOLD AS IS is typically part of the disclosure package. The seller has nothing to put into the sale, so normal fees a seller would pay become the responsibility of the buyer. Fees may range depending on title, and buyer sometimes cover, condo association dues, executions/judgements, title V, smokes and possibly other issues.
Does hiring you make the sale go quicker?
That depends. Our canned response is no, however Nick and Maryann have been negotiating short sales in Massachusetts since 2008, so we know how to work through the issues, where to reach certain lenders, look at the sale from the beginning and address problems before they happen, and because of this it MAY go quicker than if you hired an attorney, or had an agent that wasn’t very knowledgeable in short sales.
How do I refer a sale to you?
Referrals come in to us from attorneys, homeowners, agents, some underwriters, and a slew of different places. If you feel you have a homeowner that needs a short sale, call Maryann at 978-384-0032 so she can assess the homeowner situation. We do NOT TAKE EVERY SALE. If you have a title that we just don’t see we can make work, we won’t take the sale. If you have not been forthcoming with information, we won’t take the sale. We take sales that may have issues, but sales where a homeowner, agents, and buyer are invested in seeing it close. It’s a team effort.
Can I do a short sale with two mortgages?
Yes. We have done hundreds of sales with two mortgages and other items on title. If you have no equity so that both your mortgage companies are short, we immediately negotiate with both to come to an agreement. Sometimes the first lien holder may be paid in full from the sale, so we are negotiating with only the second mortgage holder. We call these second onlys. When we get a second only, are communication is through that second lien and they are the ones we negotiate for the payoff.
Is my deficiency always waived?
No. In most cases YES the deficiency is waived, but not always. Your deficiency is the amount you owe, minus the net amount the bank receives for your property. Massachusetts is a recourse states and a short sale lender CAN come after you for the balance or “reserve their right to pursue a deficiency” – that’s not always an ideal situation however many times it’s based on the homeowner, income, assets and other factors. If a short sale bank in Massachusetts feels you have some ability to repay the loan, you may be asked for either cash at closing or a note. This may be different than a lender reserving their right to pursue the deficiency. They feel as a good faith effort, if you have good income that if you sign a note for a portion of the balance or pay cash at closing, they will release the remaining deficiency. Each short sale is different and has different circumstances, but for the most part, lenders will waive their deficiency, but don’t always expect it.
Will I get cash from the sale if I sell?
Maybe. I am concerned that some short sale listing agents go around and tell homeowners they can have cash from the closing. This is largely based on investor guidelines. So what does that mean? It means the INVESTOR will make the decision on whether or not you get anything at closing. For example, Fannie and Freddie backed files allow a $3000 moving incentive, but you MUST still be living in the home at the time of the appraisal. HAFA which ended December 2016 used to offer a qualifying homeowner up to $10,000. These loans were specific and offered by some investors. I’ve seen agents try to get a sale and homeowner money which morally and ethically wrong in my opinion. No one should tell you they can get you money at closing for a short sale. Plan on going in and receiving nothing.
When should I consider a short sale?
After you have explored all your other loss mitigation options. If you want to remain in your house, and haven’t attempted a loan modification, don’t call Massachusetts Loss Mitigation services, Short Sale Mitigation, LLC. If you want to remain in your home and bankruptcy is a option for you, don’t call Massachusetts Loss Mitigation Services. Make sure you have done all you can to keep your home IF YOU WANT IT, and if you have exhausted your options then please call us.
My lender just scheduled an auction, now what?
If your lender gave you a date for the auction and it is more than 37 days out, we can still work with you if you have an offer on the property or can get an offer. We work with dozens of knowledgeable Massachusetts Short Sale listing agents. If it is under 37 days your lender has NO OBLIGATION to stop the auction, however it doesn’t necessarily mean your lender won’t stop the auction. Some may. We have some methods that may help, but there are no guarantees
I have a Massachusetts Reverse Mortgage, can you still do a short sale?
YES YES YES. This type of sale is our specialty. You should understand that if the seller is deceased, the property will have needed to move through probate. If the seller is still alive, but not able to work through the short sale they can sign a power of attorney. Please note this sale does NOT allow for moving assistance or money at closing.