Do I Qualify for a Naperville Short Sale?

Distressed Naperville homeowners usually ask the question “Do I qualify

for a Naperville short sale?”

The housing crisis put millions of Americans underwater with their mortgages. More and more homeowners are turning to short sales to avoid foreclosure.

A short sale (also know as a pre-foreclosure sale) happens when the homeowner and their mortgage company agree to sell the home for less than the amount remaining on the mortgage. This is a loss to the lender but they usually accept short sales since they stand to lose more in a foreclosure. The seller does not profit from the short sale but can be released from the debt and avoid the negative impact of a foreclosure.

Although short sales are a better alternative to foreclosure, not all sellers can qualify for it. Before you start the short sale process, it will be helpful to know if you pass the qualifications for a Naperville short sale:

1. The value of your home has dropped.You can back this up by asking for a comparative market analysis from a qualified Naperville short sale agent. The comparative market analysis will show the value of similar home sales in your area and will substantiate that your home is really worth less than the mortgage you still owe the lender.

2. You can no longer afford your mortgage payments.A lender will need proof that you cannot afford or will not be able to afford your mortgage. Lenders used to not approve short sales if the homeowner was still current on mortgage payments. Lenders now realize that there are other factors that may contribute to a potential default in mortgage payments. Many lenders are eager to nip a foreclosure in the bud to avoid bigger losses in the future. This means you may qualify for a Naperville short sale if your mortgage payment is only in the “near default” status.

3. The seller is experiencing a financial hardship.

The seller must be in a situation which has caused or will cause the seller to stop making monthly mortgage payments. The seller must submit a hardship letter to the lender explaining the reason why they cannot pay the monthly mortgage anymore and why the seller cannot pay the shorted difference upon completion of the short sale.

4. The seller does not have other assets.

This is also called “insolvency.” The lender will want to see that the seller does not have any liquid assets they can use in order to pay for the outstanding mortgage balance. The lender may ask the seller to submit financial documentation to back this up like tax returns and financial statements. If the lender discovers that the seller still has assets (this includes cash in a savings account, stocks, bonds, properties, IRA accounts, etc.), the short sale may not be approved since the lender feels the seller is still capable of paying the deficiency caused by the short sale. There are some instances when sellers with assets are granted a short sale, but the lender may require them to pay back the deficiency after the short sale is completed.

If you have questions or feel you may qualify for a Naperville short sale, please contact certified Naperville short sale agent Teresa Ryan at 630-276-7575 for a free consultation.

Teresa RyanBroker/Owner, CDPE

Ryan Hill Realty1001 E. Chicago Ave., Ste. 103

630-276-7575TRyan@RyanHillRealty.com