OOPSIE!

Honey, The Bank Says They Are Taking Our House! 

Ok. I know you never thought it would happen to you. You just received a knock on the door and certified letter telling you a Lis Pendens "notice to the world of a pending action/claim by a 3rd party against your home for a debt." That party wants the house back! What do you do? 

• Educate Yourself & Study Your Options

You need to know your options when it comes to your home. Their are a variety to consider but I will elaborate on the following three:

1. Deed In Lieu. If you owe more than the home is worth, this might no be the best option for you. Deed in Lieu means that you give up the house to the bank and walk away. Ie, you give up the deed instead of facing foreclosure.
2. Bankruptcy. If you want to keep your house, but can’t make the payments and your total outstanding liabilities are equal to or in excess of your total assets you might want to file bankruptcy. Keep in mind recent changes to the bankruptcy laws have eliminated many consumer friendly provisions of the former statutes. You need to call a qualified bankruptcy attorney should you further consider this option. This will temporarily stay the foreclosure process (not forever) and may allow you to stay in your home and repay your lender under different terms. Florida's Homestead law, is a strong protection for you to discuss with your attorney in the event you still have significant equity in your Homestead.
3.  Short-Sale. It's called a "short sale" because you'll be selling the home for a net price that is "short" of what you owe the lender(s). If you chose a Short-Sale

• Don't Procrastinate

Once you have looked at all of your options and made your decision, get moving! The biggest mistake you can make is waiting until it's to late! The court date is coming up!

• Initiate Plan Of Action

1. Many lenders will require that we have your home listed for at least 60 days before they will consider a Short-Sale. Therefore, we must immediately input your home into the M.L.S. Additionally, odd as it might seem; lenders are often reluctant to accept a Short-Sale unless you are at least 90 days delinquent on your mortgage(s). Unfortunately, many times one finds themselves becoming further behind on the payments before their lender(s) will negotiate.
2. We must quickly procure a buyer for your home. We must price the home below market to attract a willing and able buyer. Time is our biggest enemy. Don't cry about how much money the home next door sold for.
3. Provide us with all of your lender(s) contact information as well as that of any third party debt collector(s). We will need to following: lending institution(s) full name, the loss mitigation department(s) and third party debt collector(s) direct contact phone numbers along with any extensions; your loan number(s); name(s), times and dates of all parties you spoke to and whom the direct person(s) of contact/person(s) of authority is with that lender/attorney; their email address if available and any recent relevant written correspondence.
4. Send your lenders(s) direct persons(s) of contact/person(s) of authority a signed authorization form enabling us to speak with them regarding your account. We have a general authorization form right on our web site under the bottom left tool bar heading, "Resources."
5. Your lender(s) will not negotiate or proceed with a Short-Sale request before we obtain a bona fide contract.
6. Once a contract is obtained, we will submit the completed contract to the loss mitigation department(s) & or attorney(s) for the lender(s). 
7. Have your lender(s) Short-Sale package(s) sent to us. Your lender(s) will want a list of certain items before they consider taking a bath on your property. This package might include but is not limited to; (pay check stubs, recent bank statements, & a hardship letter, etc.). The lender(s) is much more likely to agree to a Short-Sale if you have a legitimate hardship such as a major health issue or loss of a spouse. Your letter should clearly explain your unique circumstances. Be careful not to blame other third parties. Take personal responsibility!
8. We must review your completed Short-Sale package before either of us send it to the lender(s).  If any information is missing we must document the reasons in writing. Be careful about discrepancies between your income and the income used to obtain the loan.  A big gap may raise the concern of fraud with the lender(s). 
9. The completed Short-Sale package must now be returned to your lender(s). We highly recommend that any correspondence you send be via certified mail & or any other expeditious means with verifiable delivery.
10. The lender(s) will order a Broker Price Opinion (BPO) once they receive a fully completed Short-Sale package. The purpose of the (BPO) is for the lender(s) to obtain an opinion of value of the property from a qualified third party. The value indicated is at the heart of the entire Short-Sale process. The lender(s) will not negotiate a Short-Sale if the (BPO) sufficiently supports a value high enough for a probable sale in the open market equal to or greater than that of accepting a Short-Sale. The lender will weight many other complex considerations in making their final determination such as:

The state of the market within which the property is located. Lenders are much more likely to agree to Short-Sales in declining buyer driven markets. The condition of the property. Lenders are often eager to take a substantial loss for homes in severe disrepair. The cost associated with finalizing a foreclosure and then marketing a property.The lenders own financial standing can also be a factor. Do they have the resources to hold the property.

If the short sale is accepted, time is of the essence! Lender(s) do not like to play games once they have agreed upon a lower price. Performing on the contract by the stipulated date is paramount.

This process can take a week, a month, or several months depending upon many factors.  It's important for all parties to know that this is a lengthy process and that patience is a virtue.