why does it say attorney involved in a short sale in il

A short sales attorney will assist in streamlining the complicated process in order for the homeowner to receive the advantages. The common alternative to a short sale is a foreclosure whereby the lender seizes the home after the homeowner fails to make the necessary payments.

Full Answer

Do you need a lawyer to sell a short sale?

On the other hand, there are plenty of real estate agents running around who are calling themselves certified short sale specialists because they slept through a 3-hour class somewhere but have closed few, if any, actual short sale transactions. To cut to the chase, if you have legal questions, you need to hire a lawyer.

Can a bank ask for a seller contribution for a short sale?

If the seller is attempting a short sale without hardship, it is highly likely that the bank will ask for a seller contribution. Even if the seller qualifies for a short sale through a financial hardship, the bank could demand a contribution. This means the seller could be required to bring in money to close.

Do you have to bring money to close on a short sale?

Even if the seller qualifies for a short sale through a financial hardship, the bank could demand a contribution. This means the seller could be required to bring in money to close.

What kind of real estate agents handle short sales?

In California, generally licensed real estate agents handle short sales. At the time of writing, Elizabeth Weintraub, BRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California. New York State. " Real Estate Brokes and Salesperson and the Unauthorized Practice of Law ."

How does a short sale work in Illinois?

You have to make an offer that satisfies the lender, reduces their loss, while still saving enough room for you to see some returns. In Illinois, mortgage holders must respond to a written request for approval of a short sale within 90 days of receipt of a qualified offer from a new buyer.

How long does a short sale take in Illinois?

The short sale bank can take up to six months to get through the process. You really should have an attorney who is experienced in the short sale and foreclosure process. The attorney will be able to assist in securing more time to complete the short sale, if necessary.

Who are parties to a short sale transaction?

Short Sale: Definition And Explanation A short sale is a way for a homeowner and their lender to get out of a difficult financial situation by taking a loss, so it's often possible for a buyer to profit from this transaction. However, buyers should be aware that these transactions are not always good investments.

Do you have to pay back a short sale?

All of the proceeds of a short sale go to the lender. The lender then has two options—to forgive the remaining balance or to pursue a deficiency judgment that requires the former homeowner to pay the lender all or part of the difference. In some states, this difference in price must be forgiven.

How can I speed up a short sale?

Speed up your short sale closing date by making your offer as free of contingencies as possible. Submit your mortgage approval with the offer. Contribute a substantial deposit to show your good intentions.

What happens after a short sale is approved by the bank?

After accepting an offer, the homeowner or his realtor must forward the offer to the lender for review. If the lender approves the offer, the short sale moves forward. If the lender does not accept the offer, the buyer may counteroffer or end the process.

Why are short sales so difficult?

Short sales are a mixed bag for the buyer, the seller and the lender. If you're a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. You'll also walk away from your home without a penny from the deal, making it difficult for you to find and pay for another place to live.

Why do banks prefer foreclosure to short sale?

It costs more to the lender to go through the foreclosure process. During a short sale, the lender shares the cost with the homeowner to quickly sell the home. From a financial standpoint, many lenders prefer a short sale if the home is not expected to sell for more than the balance due at the foreclosure auction.

What's one reason that buyers might need additional cash at closing for a short sale?

What's one reason that buyers might need additional cash at closing for a short sale? Short sales don't clear liens from the title, so buyers may have to pay debts at closing.

What is the downside of a short sale on a home?

Disadvantages of a Short Sale A short sale comes with quite a few catches. There are more parties involved than a typical sale making the process complicated and often lengthy. In a traditional home sale, price negotiations happen between the buyer and seller (or their representatives), not the seller's bank.

Do short sales hurt your credit?

Yes. There is no way to avoid the damage a short sale does to your credit score. A short sale can knock as much as 160 points off your credit score, but the level of damage heavily depends on your credit standing before the short sale and how much your lender gets in the sale, among other things.

Can you offer less on a short sale?

Can You Negotiate A Short Sale? It is entirely possible to negotiate a short sale, but doing so can be a time-consuming process. Instead of negotiating with the seller alone, as is the case with most traditional sales, short sale negotiations must be approved by the lender, too.

Why do you need a lawyer for a short sale?

Why You Need to Hire a Lawyer to Negotiate a Short Sale. To cut to the chase, if you have legal questions, you need to hire a lawyer. It is against the law for a real estate agent who is not licensed to practice law to dispense legal advice. Even if the agent knows the answer to a legal question, a real estate agent is not allowed to tell you. 1.

Does California require a lawyer to handle a short sale?

While the government HAFA short sale program offers some protections for sellers, it doesn't take the place of obtaining legal advice. Also, some states require that a lawyer handle the short sale. California is not one of those states. In California, generally licensed real estate agents handle short sales.

Can a bank ask for a short sale?

That's why the bank looks at the seller's assets and disposable income. If the seller is attempting a short sale without hardship, it is highly likely that the bank will ask for a seller contribution. Even if the seller qualifies for a short sale through a financial hardship, the bank could demand a contribution.

Can a bank release a seller from personal liability?

Although a bank may forgive the balance between the mortgage balance and the final sales price, the bank might not release the seller from personal liability. This means it is possible that the bank might be able to legally garnish a seller's future wages, attach bank accounts or otherwise pursue the seller for that money. It's called a deficiency judgment. 2 The short sale approval letter may or may not contain verbiage that spells out the bank's specific rights. Absence of such language is no guarantee the bank has released a seller.

Why do you need a short sale?

A short sale is one of the financial options to help reduce the panic and debt whereby the home is sold for less than the balance remaining on the mortgage. Essentially, the homeowner is “short” on the cash required to fully pay back the lender (normally the bank). The lender agrees to a short sale in order to receive a portion of the mortgage still owed to them without the need to incur the expenses of the foreclosure process as well as the time and effort involved in rehabilitating and selling the subject property. A short sales attorney will assist in streamlining the complicated process in order for the homeowner to receive the advantages.

Can a short sale reduce mortgage debt?

Short sales are only one option to reduce debt on a mortgage. With the help of a short sale attorney, homeowners can choose the best option suited for them . By opting for a short sale, foreclosure and its disadvantages are avoided. In exchange, there are a few benefits that are gained through a short sale.

What can an attorney do for a short sale?

An attorney can review the foreclosure papers and advise you about your different options if this happens. By hiring an attorney for the short sale process, you'll have ready access to legal advice and counsel on what, if any, action is required if and when the foreclosure happens.

What is short sale in mortgage?

Short sales are one way for homeowners who are behind in mortgage payments to avoid a foreclosure.

What happens if a lender forgives you?

Keep in mind you might face tax consequences if the lender forgives all or part of the deficiency. If the lender does get a deficiency judgment against you, an attorney can potentially help you file bankruptcy to get rid of the judgment—and provide advice about whether this is a good idea.

What happens when you short sell a house?

In a short sale, the lender agrees to let you sell the property for less than what you owe on the loan and to accept the proceeds in exchange for releasing the mortgage lien. Example. You owe $200,000 on your house and you find a buyer willing to purchase it for $150,000.

What is the difference between a short sale and a mortgage?

In a short sale, the difference between the sale price and the total mortgage debt is called a "deficiency.". Again, let's say the total debt you owe on the first mortgage is $200,000, but the short sale price is $150,000. The deficiency is $50,000. In most states, the lender can seek a personal judgment against you to recover ...

What is the difference between a real estate agent and a lawyer?

The primary difference between lawyers and real estate agents when it comes to short sales is that a lawyer can not only negotiate the short sale, but also give you legal advice about the transaction. And, in many instances, the lawyer can represent you in a foreclosure action or help you file bankruptcy, if the short sale falls though.

Can a short sale be released from personal liability?

You're Concerned About a Deficiency Judgment. While the lender might agree to release its lien in exchange for the short sale proceeds, it might not release you from personal liability on the debt and could potentially come after you for a deficiency judgment.

Why is a short sale so complicated?

In those cases, the short sale is further complicated, as subordinate lien holders have little incentive to release their liens.

What does short sales on investment property mean?

Short sales on investment or rental property, second homes, or vacant homes are less common, as these types of properties can be red flags for lenders and can indicate seller solvency or raise questions of compliance with mortgage guidelines.

What is a short sale for a home?

A short sale allows an underwater seller to transfer property for a price that is less than the amount needed to pay all liens, encumbrances (including mortgages and property taxes) and closing costs (including the transfer taxes, brokers' commission, title insurance fees, and attorneys' fees and costs). The short sale process is complex and involves coordinating many parties (e.g., servicers, investors, subordinate lien holders, and mortgage insurance companies), who must all agree to accept a loss on an outstanding debt. As a result, it often takes months to complete a short sale.

How to increase seller's chances of short sale?

To increase the seller's chances of obtaining short sale approval, submit a complete short sale package to the lender as soon as possible after the lender is notified of the seller's hardship. Short sale requirements vary widely from lender to lender.

What should a sale contract bear?

The sale contract should bear a reasonable relationship to the property's fair market value. However, determining fair market value is difficult, and in today's market, properties must be priced low enough to attract qualified buyers, yet high enough to convince lenders to accept short payoffs.

How to facilitate a short sale?

If a client chooses to pursue a short sale, you can help facilitate the timely completion of a short sale by being mindful of some important keys to success: Set Expectations with Seller. Help clients set realistic expectations regarding the viability of the short sale at the beginning of the process.

How long does it take to get a short sale approved?

As a result, it often takes months to complete a short sale. Attorneys can help distressed homeowners assess the viability of a short sale by counseling them on the factors that can complicate their ability to obtain short sale approvals. This article discusses some of these short sale approval factors and identifies some keys to success.

Why do short sales fail?

Many short sales fail when buyers walk away due to their unwillingness to wait the many months it often takes ...

How to get short sale approval?

Short sales are difficult to complete. The process is inefficient and labor intensive. Let us take care of the administrative tasks involved in obtaining short sale approvals so you can focus on doing what you do best—representing your client. Our experienced Short Sale Coordination professionals perform the following tasks: 1 Work directly with attorneys and their clients to assemble and submit documentation in an efficient and timely manner to persuade the lender to agree to the short sale. See our S hort Sale Coordination Package. 2 Partner with the Seller's attorney to prepare and submit the HUD-1 Settlement Statement. 3 Communicate with lenders and servicers throughout the short sale process, saving the attorney valuable time.

Is short sale labor intensive?

Short sales are difficult to complete. The process is inefficient and labor intensive. Let us take care of the administrative tasks involved in obtaining short sale approvals so you can focus on doing what you do best—representing your client. Our experienced Short Sale Coordination professionals perform the following tasks: