San Clemente Short Sale Success Story – Case Study #23: Our real estate company, ShortSalesASAP, conducted another successful short sale which we will describe herein. We will leave out address, names and other private details to protect the privacy of the past homeowner. This detached home was located in Talega in the Solona tract of San Clemente, Ca. This was a 3 bedroom, 2.5 bath with 2 car garage and 1,950 square feet of living area, built in 2001.
This home was purchased by the homeowner in August of 2006′ for $860,000, using a nothing down 80/20 purchase money loan. The 1st mortgage loan balance was approximately $685,000 and the 2nd mortgage was with Countrywide with an approximate loan balance of $175,000. The 1st mortgage was a fixed rate loan with Wells Fargo, and the 2nd loan was a variable rate.
San Clemente home prices have dropped about 32% since the height of the market in mid 2006. California and specifically southern Cal, is being hard hit by the recession and nationwide mortgage loan crisis. This Talega short sale home also dropped in price by about %35. Due to the severe recession here locally, the homeowner was experiencing a difficult financial hardship which prevented them from keeping current on the mortgage loans. They contacted us as a result of a past client reference, to conduct a short sale.
Step 1: We first gather all of the required documents from the homeowner which includes a simply financial statement, 2 months bank statements, several Pay Stubs, Hardship letter, and bank account balances. We package this information along with other market data and present our short sale case to the Banks. After some hand twisting negotiations with the 1st and 2nd mortgage holders, we got them to preliminary agree to certain short sale terms and conditions. This Preparation Phase took about 5 weeks to complete. During this phase, the property owner lived in the home as usual with no interruptions to their daily lives. And due to their hardship, they were unable to make their mortgage and lived payment free.
Step 2: Once we received preliminary short sale approval, we began the process of Marketing the property for sale. This San Clemente home was marketed on the Multiple Listing Service, and also on the Internet but the short sale status was not displayed on any Internet advertising to the public. The listing price was set at $580,000, which was approximately the market value at that time. After a period of about 3 weeks, we obtained an offer from a qualified buyer for $545,000. After some back and forth negotiations from our listing Realtor, we arrived at a price of $555,000.
Step 3: Once the listing Realtor acquired all of the necessary signatures from the buyer and seller, and reviewed the loan qualification status of the buyer, we opened escrow. Our short sale team then packaged the new purchase offer, along with required Short Sale disclosures and Buyers loan qualification paperwork, and submitted the package to the 1st and 2nd mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs.
After some tough negotiations with our expert short sale Realtor team, and our attorney, we got both the 1st lender, Wells Fargo, and 2nd lender, Countrywide, to agree to this short sale offer of $555,000. Once we received the bank short sale approval letters, we moved forward with the buyers closing through escrow. This last step was completed in about 21 days.
Final Result: After the completion of the short sale, and close of escrow, the $860,000 total mortgage debt on the home was retired. The homeowner was able to rent a comparable home and is saving about $1,400 per month. The homeowner was able to live in their home during this short sale process and did not make any mortgage payments. In addition, the homeowners FICO score was not as negatively effected as it would have been if the banks had foreclosed.
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
