North American Title Company Helps You Help Sellers with Short Sales
 
While the U.S. housing market is slowly but surely improving, short sales will be part of the residential resale picture for some time to come.
 
What is a short sale?
 
A short sale, also known as a short pay or short payoff, allows Homeowners to sell their property for less than the amount owed on the mortgage. It is an agreement with the homeowner’s Lender to accept less than what is owed against the property on the mortgage to allow closing – even though the balance is not always forgiven.
 
How do I know if my client will qualify for a short sale?
 
First, take a detailed look at the property, listing all loans/liens in order of priority, and then determine the rights of each position.
 
Second, before you take a short sale listing, it is crucial to educate Homeowners that you will need their cooperation for the Lender to approve the short sale. They will be required to provide you with current financial information necessary to complete the Lender’s loss mitigation package. It is helpful to gather this information in advance to alleviate any surprises. Some lenders will have you submit this information before you receive an offer; others will require the package be submitted with an offer.
 
You also will need to determine if the Homeowner has a hardship to qualify for a short sale and if the hardship or assets will be a factor in negotiating the short sale.
 
If the loan is recourse – meaning the Homeowner is personally liable for the loan shortage – the Lender may require the Homeowner to execute a separate promissory note for a portion of the shortage. Alternatively, the Lender may issue a 1099 or seek a deficiency judgment. Your Homeowner will need to be aware of these possibilities and should discuss them with a tax expert.
 
How do I help Homeowners through the difficult short sale process and make money at the same time?
 
Agents typically encounter two major difficulties when dealing with short sales – time and closing ratios. North American Title has developed the Priority Short Sale Services Program to alleviate these difficulties for our customers.
 
The program can eliminate up to 60 percent of the time an agent normally spends on a short sale transaction and it can double or triple your closing ratio.
 
How? The biggest frustration in a short sale is the amount of time you spend on hold and leaving voicemails that are not returned. Our Priority Short Sale Services Program solves this problem, greatly reducing the amount of time you have to invest short sale process.
 
NAT’s Priority Short Sale Services department determines:
 
  •   The status of the file
  •   If the Lender is in need of any additional information
  •   Whether a BPO or appraisal has been ordered
  •   When the file will be turned over to the negotiator or Loss Mitigator
 
Our Priority Short Sale Services department communicates with you every step of the way and your Escrow Officer plays an integral role in those communications. Once the Loss Mitigator informs our department that the file is ready, the information is turned back to you so you may complete any necessary negotiations required to close your file.
 
Contact your North American Title Company business development manager today to learn more about this innovative program, or email: ClientCareCO@nat.com