This Short Sale Case Study outlines another successful short sale transaction that was conducted for a detached home located in the Vista De Oro subdivision in Aliso Viejo, Ca.

ORIGINAL PURCHASE:  This large detached home was bought by the homeowner in March of 2007′ for $770,000.  This home was purchase using Zero down financing, and there was a 1st Mortgage with a loan balance of $620,000 and a 2nd mortgage with a loan balance of $150,000.   The fist loan was a fixed rate mortgage and the 2nd loan was an adjustable rate loan.

This single family detached home was 4 bedroom, 3 bath,  2,200 square foot home, with 2 car garage.  This property was sold and closed escrow in December of 2008,  via a Short Sale by the Aliso Viejo  ShortSalesASAP company.

FINANCIAL CRISIS:  Home values have decrease by about 35% since the peak in pricing in Spring of 2006′,  throughout Orange County, CA. and in Aliso Viejo as well.   This Aliso Viejo short sale property dropped in value by about 25? % From the time this home was purchased in 2007′, until it was sold at the end of 2008′.

The homeowner was having financial difficulties and was having a very hard time keeping up with their loan payments.  Their debt to income ratio was to high to qualify for a Loan Modification, and the home was upside down by about $200,000.

SHORT SALE PREPARATION: This Aliso Viejo home was initially put in our Short Sale Preparation Phase. Here we gather all of the required documents from the homeowner and contact the banks to present our short sale case.  With some hard knock negotiations, our expert team was able to obtain preliminary approval for the Short Sale along with terms and conditions.   This Preparation Phase took about 4 weeks to complete.  During that time the homeowner was able to live in the property as normal, with no interruptions from other agents or prospective home buyers, and due to their hardship, were forced to stop making their mortgage payments and lived rent free.

SHORT SALE MARKETING & SALE: the next phase was the  Marketing-Sales of the pre-approved short sale.  The home was marketed heavily and posted in the Multiple Listing Service (MLS) for a price of at a price of $649,000. After a period of about 3 weeks, the price was dropped to $599,900.  We finally found a qualified Buyer and after several counter offers, we were able to get them to offer $580,000 to purchase this home.

CLOSING PHASE: After the purchase offer was signed by the buyer and seller, we opened escrow for the new buyer.  We packaged the purchase offer, Short Sale disclosures and Buyers loan qualification paperwork. We submit the updated package to the 1st and 2nd mortgage banks.  Our post short sale specialist then expedites the delivery of these documents to the bank negotiators to finalize the short sale and obtain the approval letters in writing.

Many people ask us why a mortgage bank would accept a short sale.  Well the reasons are many, but the bottom line is that banks have determined that they loose 15% more when they are foreclose as compared to accepting a short sale.  These savings are due to reducing loss of the time value of money, avoiding property damages, eliminating foreclosure legal expenses, and minimizing bank management overhead expenses.

FINAL RESULT:  At the completion of this short sale, the homeowners mortgage debt was completely eliminated.   The homeowner lived in their home during this short sale process and did not have to make any loan  payments. They were also able to rent a comparable home for substantially less then what their payments used to be. In addition, the homeowners credit was less damaged by the short sale as compared to a foreclosure. In addition, Fannie Mae (FNMA) altered their underwriting policy, so that a past homeowner only has to wait 2 years before they can buy another home using FNMA underwritten loans.  If the homeowner went through foreclosure, the waiting period would be  5 years !

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com