www.OverFinanced.com Minnesota Short Sale Homes What is a short sale



Ron Orr, Jr. Real Estate Agent/Broker MinnesotaInvestors.com, Inc. Phone:763-546-9090 Cell:763-300-1648 Fax:763-390-0011 ron@minnesotainvestors.com

The Full Minnesota Short Sale Article can be found here The *definition of a* Real Estate Short SaleThe definition of a Real Estate Short Sale is: A lender’s agreement to accept less than is owed (short payoff), as an alternative to foreclosure. is: A lender’s agreement to accept less than is owed (short payoff), as an alternative to foreclosure. What is the difference between a real estate short sale vs. foreclosure home and what does it mean and how does it work? This is a popular and important question in today’s national economy. I will define a short sale for you later in this article, but first I want to tell you why their seem to be so many short sales going on right now, so I will get into the definition of short sale in just one moment, but first please let me go over some of the common reasons and situations on how a homeowner gets into the situation and then on how to save your home from foreclosure through what’s known as the short sale process. I believe some of the most common situations that the homeowner gets into resulting in pre-foreclosure, is that they get behind on payments, and soon they are facing foreclosure, they soon learn that due to the current real estate market and how home values are going down quickly It’s then, that the homeowner realizes they have little or no equity and therefore they can’t afford to even pay real estate commissions. If it’s an investor or burnt out landlord they may get into a situation where it needs too many repairs, of which they can’t afford, and then the property becomes a vacant house due to many reasons like a job transfer, or a sudden need to move. Here is where the homeowner needs help and at this point we will call upon a short sale specialist as we now have an owner with a mortgage with a lender like Countrywide or a bank like Wells Fargo with a short sale house situation. What is the Timeline for Foreclosures in Minnesota? Here is a diagram: http://mnrealtor.com/consumer/ForeclosureProcess.pdf Let’s first go over the original loan that the buyer (borrower) at the time received when they initially purchased the property at the closing table. During the initial loan process, the 2 items the buyer signed at the actual closing with the title company were: 1: The Promissory Note: This document does outline the terms of the agreement made between the buyer and the lending bank. By signing this document, The borrower promises to repay the bank the debt. Promissory notes will almost always include a default provision that would enable the bank to charge the buyer for any late payments along the way. 2: The Mortgage: After the promissory note is signed, the borrower then gives the bank a mortgage and he/she(buyer) becomes the mortgagor and the bank becomes the mortgagee. This mortgage document will contain the following provisions: Acceleration Clause upon default: this provision would give the lender the right to seize the property if the borrower were not to honor the terms of the promissory note. This right, that the borrower has, would end as soon as the borrower cures the default by catching up on any delinquent amount in the arrears, if the buyer refinances, or if the buyer sells the property and pays off the loan. Due On Sale Clause: this provision would give the bank the right to call the loan due upon the transfer or (conveyance) in the property. The lender does have the right to do this per the provision in writing, but doesn’t always enforce it. Mortgage Covenants: these covenants known as rules or (promises) force the borrower to do certain things such as: make sure the property is insured and keep the property in good repair, pay property taxes, essentially it’s in there to protect the lender. Please Read the Entire MN Short Sale Article Here