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Distressed Sales: REO and Short Sale Specialists

What are Distressed Sales?

Distressed Homes and Foreclosure

Remember the story of Chicken Little and the Sky is Falling?  That scene can describe homeowners when they get the news that their home is in foreclosure. A measure of panic is key and a necessary part of the mix. But the fact that there is a mix is important. Panic needs to combine with knowledge, resilience, determination and resources. There are options.  The earlier a homeowner acknowledges that they are in the process, the more options they have but they’re most likely to do well with a guide team.  The Lighthouse Team can help guide a homeowner through.

What is a Short Sale?

A short sale is the sale of a home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds and avoid foreclosure. If Fannie Mae is the first lien holder, we work with the mortgage company that services your loan (i.e. collects your mortgage payments) to communicate with you throughout the short sale process. We provide guidance to the servicer on who is eligible for a short sale, the property listing price, and acceptable contract terms and closing costs.

In addition to avoiding foreclosure, short sale benefits include:
  • Eliminate remaining mortgage debt.
  • Assistance for relocation may be available up to $3,000.
  • Start repairing your credit sooner than if you went through a foreclosure.
  • May be able to get another Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years).
  • Avoid foreclosure.

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Short Sale

Short Sale

By Fannie Mae

If you're facing foreclosure and can no longer afford your home, you may qualify for a short sale—even if you don’t think you can (or haven’t been able to) sell your home.

A short sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage servicer agrees to a short sale, you can sell your home and pay off a portion of your mortgage balance with the proceeds. Depending on your situation you may be required to make a financial contribution toward the balance, but once the short sale is complete you’ll be relieved of your responsibility to pay any remaining balance—called a “deficiency waiver.”

A short sale is an alternative to foreclosure and may be an option if you:

  • Are ineligible to refinance or modify your mortgage
  • Are facing a long-term hardship
  • Are behind on your mortgage payments
  • Owe more on your home than it's worth
  • Haven't been able to sell your home at a price that covers what you still owe on your mortgage
  • Can no longer afford your home and are ready or need to leave
  • Beware of Scams

    Learn how to identify and avoid scam artists who promise immediate relief from foreclosure.

    Find out more »
  • FAQs

    Find the answers to common questions concerning your mortgage and the various options to avoid foreclosure.

    Find out more »
  • Glossary

    Visit our glossary of key terms to increase your understanding of the foreclosure options available.

    Find out more »
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