Is a Strategic Short Sale a Smart Move for Long Beach Homeowners?

Written by on July 13, 2010
  • Did your Long Beach neighbor just sell their house for less than you owe on your mortgage?
  • Did you buy the perfect starter home, but now need to stay in it at least 5 years longer than you planned just to break even?
  • Has your lender refused to modify your home loan?
  • Do you think you might lose your job soon, but haven’t missed enough mortgage payments to claim financial hardship yet?

Despite the fact that you don’t have a documented financial hardship, and are current on your payments, it’s not impossible to submit a Short Sale request to your lender.

Traditionally, to complete a Short Sale you must be in serious financial trouble –  unemployed, getting a divorce, have paying medical bills, or being forced into relocation. The minimum requirement was being at least 2 months behind on your mortgage payments and facing foreclosure.

Today, depending on your situation, your lender may overlook the financial hardship classification and accept your request in good faith.

This is called a strategic Short Sale.

Over the past few years, Shandrow Group has worked with hundreds of families facing foreclosure or considering Short Sales. We have worked with every major lender and credit union in Long Beach, CA and recently, we’ve closed Short Sales for clients who have never missed a mortgage payment, were up to date with their loan requirements, and did not have a documented financial hardship.

Why did lenders approve these strategic Short Sales?

  1. Lenders are overwhelmed with Short Sale requests, so they can’t afford to aggressively pursue borrower hardships. The negotiators at the banks are overwhelmed with foreclosures and Short Sales. They just don’t have the time to spend on each file. This gives you the chance to make a case that gets their attention, proves that you have considered the options, and their bottom line, the negotiator will approve it and move on.
  2. Lenders weigh the financial options of the return on Short Sales or the chance that a homeowner will walk away from their mortgage. Many lenders look at a borrower who is applying to do a Short Sale and very realistically conclude that either the borrower will request a Short Sale, or they will walk away and let the house go to foreclosure. A Short Sale is definitely a better option for the lender.
  3. At Shandrow Group, we’re familiar with the unwritten Short Sale policies of many lenders, and we know how to submit a Short Sale package with a better chance of acceptance. Different lenders have different hot buttons. Some lenders will not accept a Short Sale on a non-owner occupied property. Some banks will accept a Short Sale for a borrower who is current on their loans, while others require that the borrower be behind on their payments. Working with a Short Sale agent will help you figure out these buttons so you get a better chance of receiving your approval.

So, what does this mean? Some lenders are now beginning to look at their bottom line profit of a Short Sale vs. a homeowner walking away from their mortgage.  In other words, most lenders realize that they can’t take on any more foreclosures and will consider homeowners who do the work to put together a convincing Short Sale request.

One difference we’ll see in the near future is an increase in the number of homeowners considering strategic Short Sales.

If you have more questions about the strategic Short Sales, feel free to contact me @ 562-364-9505 or mark@shandrowgroup.com

One Less Foreclosure.

Sincerely,

Mark Shandrow
Real Estate Broker
office 562-364-9505 ext 100
mark@shandrowgroup.com
Shandrow Group
3970 Atlantic Ave., 210
Long Beach, CA  90807
follow my story at http://markshandrow.com