Nevada Short Sale Hardship

Dec. 15, 2010 - PRLog -- Las Vegas, Nevada -- Why are some homeowners asked to pay substantial promissory notes in exchange for a short sale approval, while other homeowners are not required to pay a promissory note at all?  The answer can almost always be found by looking at the experience (or lack of experience) of the Real Estate Agent.  There are certain factors which minimize hardship in the eyes of Banks and Bank Investors, and are essentially "Short Sale Deal Killers."  A Realtor experienced with short sales will be able to explain the banks perception of hardship and how it applies to your particular situation.

Here are a few scenarios which are guaranteed to raise red flags in the eyes of your bank.  Bank negotiators are trained to look for these items, and once a bank has determined that your short sale falls into one these "minimized hardship" categories, the chances of you being required to pay a promissory note increase exponentially.

1.  Your Mortgage Payment is Current.
Banks will not take you seriously if you have the ability to pay your mortgage.  This does not constitute a hardship.  Remember, a bank will only consider a short sale if they think that the chances of foreclosure are eminent.  As long as you continue to make your monthly mortgage payment, the bank will not consider your short sale hardship to be legitimate.  It is more beneficial for the bank to "sit back" and wait, to see if you will make another payment next month too.  It is possible to obtain a short sale approval while continuing to make your mortgage payment, however, you WILL be expected to pay a very large promissory note or cash contribution at closing.

2.  Collecting Rents and Failing to Pay Your Mortgage.
Banks will cooperate with investors who are experiencing hardship, however, if you are collecting rent from a tenant and failing to make the monthly mortgage payment on your tenant occupied property, then this is the #1 Short Sale Deal Killer.  Banks do NOT look favorably upon investors who are getting paid by a tenant, yet failing to honor their mortgage obligation.  In fact, these type of investors are far more likely to be sued by their bank in a deficiency judgement lawsuit than anyone else.  Non-owner occupied properties are eligible for short sale approval, however, it is important that investors understand the banks perspective of hardship.  It makes no sense to continue collecting rent from a tenant, only to wind up being sued by your bank once the home forecloses.  These type of investors will have a hard time convincing a judge that they acted in good faith.  

3.  Recent Purchases on Your Bank Statements or Inquiries on Your Credit Report.
When you apply for a short sale, the first thing the bank will do is pull your credit.  (Yes, they have the right)  They will use your credit report and your bank statements to determine the extent of your hardship.  If your bank statements show recent electronics purchases at Best Buy, or show purchases made on a recent vacation to Maui, or if your credit report shows recent credit inquries at car dealerships, etc., then you are going to have a much harder time convincing your bank that a hardship exists.  Banks are very smart.  They intentionally make the short sale process complicated, to sort out the people with actual hardship from the people who may still have the ability to make their mortgage payment.

A Real Estate agent who is experienced with short sales can help you prepare a workout package which conforms with the banks definition of legitimate hardship.  You do NOT need to be poor or broke to qualify for a short sale.  Actor, Nicolas Cage is a multi-millionaire, yet last year, he successfully did a short sale on his Las Vegas home.  Hardship is not solely determined by how much money a person earns...it also factors in a person's expenses, especially if expenses have increased and income has decreased.  

The Myers Team with Century 21 MoneyWorld has closed more short sale transactions than any Realtor, Broker or Attorney in the state of Nevada.

For additional information, please visit www.NevadaShortSaleInfo.com

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Bill and Francoise Myers, owners of The Myers Team with Century 21 have successfully sold more short sale listings than any Realtor or Broker in Nevada. They are nationally recognized as one of the most influential figures in real estate today.