What is Short Sale for Southern California Real Estate?
For information on short sale real estate in Southern California—in the coastal areas of Orange County (Newport Beach real estate to Laguna Beach), Los Angeles County real estate from Malibu and Marina Del Ray beach homes to Bel Air homes, and La Jolla real estate in San Diego County, call Bob Cumming of Keystone Group Properties at 310-496-8122.
In a short sale, the bank or mortgage lender agrees to discuss a loan balance because of the an economic or financial hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Neither side is doing the other a favor, a short sale is simply the most economical solution to a problem. Banks will incur a smaller financial loss than foreclosure or continued non-payment would entail. Barrowers are able to mitigate damage to their credit history, and partially control the debt. A short sale is typically faster and less expensive than a foreclosure. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance offer.
Lenders often have loss mitigation departments that evaluate potential short sale transactions. The majority have pre-determined criteria for such transactions, but they may be open to offers, and their willingness varies. A bank will typically determine the amount of equity (or lack thereof), by deterring the probable selling price from an appraisal or Broker Price Opinion (abbreviated BPO or BOV).
Lenders may accept short sale offers or requests for short sales if a Notice of Default has not been issued or recorded with the locality where the property is located. Given the unprecedented and overwhelming number of losses that the mortgage lender have suffered from the foreclosure crisis, they are now more willing to accept short sales than before. This presents an opportunity for the under-water borrowers who owe more on their mortgage than their property is worth and are having trouble selling to avoid foreclosure.
