Arizona Short Sale Guide

What is a SHORT SALE?

A short sale is a real estate transaction in which the seller's mortgage lender(s) agrees to accept a payoff of less than the balance on the existing loan(s).

Why you don't want to walk away or FORECLOSE

Walking away from your home and letting it go into foreclosure with the bank will be reflected on your credit report as "debt discharged due to foreclosure." It will cause a huge impact to your credit score and will affect your ability to purchase another home for about 5 years or more on average.

If you can get the lender to agree to a short sale, it will appear on your credit report as "pre-foreclosure in redemption", which has a significantly less impact on your credit score.

All mortgage debt may be fully discharged and you may be able to purchase a home again in approximately 2 years.

Step 1 - Call your lender


YOU MUST CALL YOUR LENDER - they want to talk to you and it will be your first step toward a resolution to your problem.

See list of contact numbers on the right»»»»

Just keep in mind that loan deficiencies are a huge problem right now and the lenders are busy. If you don't get through the first time, keep calling or ask me how I can help you get in contact with them quicker.

Ask for the loss mitigation department, NOT the collections department!

Once connected, be sure to make notes about your conversation - who you speak to, what you discussed and the date and time. Try to get a direct number and a single contact although this is sometimes hard to accomplish with the lender.

Be nice to the person on the other end, it is not their fault you are in the situation you are in.

Explain your situation as briefly as possible, no long dramatic stories, they don't care. Tell them what you are looking to accomplish. They will tell you what your options are and if you decide to sell your home, they will probably ask you if it is already listed with a REALTOR®.

Remember, be patient and friendly. It will get you further with the loan representative on the other end.

Step 2 - Interview a REALTOR®

Now it is time to find an experienced, full-time REALTOR® to help you proceed. A REALTOR® will outline and gather the required FINANCIAL PAPERWORKthat the lender will need to review your current situation and financial situation.This paperwork will be submitted to the lender(s) along with your HARDSHIP LETTERand an AUTHORIZATION LETTER that will allow your REALTOR®to communicate with lender(s) on your behalf from this point forward.

Step 3 - List your home


Once you choose your REALTOR® , you will complete the necessary paperwork to get your home listed for sale on the market. It is important that it is priced comparative to the current market conditions and it is marketed by an experienced real estate agent. This means it is time to put up a sign, put a lockbox on, list your home in mls with multiple photos and begin an extensive online marketing campaign for your home.

Step 3 - Attract a BUYER and get contract to the bank

This is a very important step in a successful short sale transaction. You can't proceed with the short sale process unless you have a willing and able buyer. It is important to get your home under contract with a buyer. The purchase contract will have a short sale addendum attached which indicates it is contingent upon short sale approval by your lender(s). Escrow will not begin just yet, but the short sale approval process will begin with the bank.

Step 4 - Be PATIENT, Short sales take time

Well, we have made it this far in the process and most of the paperwork is done and out of the way. Now we will wait. We are waiting for the lender(s) to review the contract, HUD settlement statement (outlining the banks net loss on the sale) and financial paperwork. BE PATIENT, this can take anywhere from 30-90 days, or longer!

The file will be assigned to a negotiator at the bank and a BPO (mini appraisal) will be ordered. This will help the lender determine the fair market value of your home. Once this is complete, the lender will issue a short sale approval letter which will be provided to the buyer's agent so they can proceed with the escrow. If all goes well, most short sales will close within 30 days of this letter depending on the terms of the original purchase agreement.

One thing to keep in mind, you may have received a notice of foreclosure on your door with an auction date. Don't panic. Most of the time the lender(s) will POSTPONE FORECLOSURE as long as you are continuing to work out a short sale on your home with an ACTIVE buyer.

Step 5 - Closing time


Almost there! Once the buyer has completed their inspections on your home, they will be ready to close upon final approval of their own loan. Both parties, buyer and seller, will complete the process of a normal real estate escrow in Arizona. The title company will produce a final HUD statement with the costs of the transaction and this will be submitted to the lender(s) for a final approval.

This can take anywhere from 24 hours to 2 weeks in my experience. It really depends on the person or persons at the bank and if there are just one or multiple loan payoffs to coordinate. Be patient! It may take time, but if everything is done right, the end is very near and you will be on your way to AVOIDING FORECLOSURE as a home seller.

Step 6 - A NEW beginning

Congratulations, you made it! Now it is time to rent a home for 2 years and get your financial life back on track.

I hope that this explanation of the short sale process is beneficial to you and your situation. Let me know if I can answer any questions you may have about short selling your home in Arizona.

HAFA (Home Affordable Foreclosure Alternative)

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Lender Contact List

Accredited Home Loans
(877) 683-4466

Acqura Loan Services
(866) 660-5408

American General
(800) 457-3741

American Home Mortgage Servicing (877) 304-3100

Ameriquest (800) 211-6926

America's Servicing Company (ASC) (866) 248-5719

Aurora Loan Servicing
(800) 550-0509

Avelo Mortgage (877) 882-8356

Bank of America (800) 846-2222

Carrington Mortgage Services
(888) 477-0193

Cendant Mortgage
(800) 750-2518

Chase (800) 446-8939

Chevy Chase Bank
(800) 933-9100

CIT Group (800) 401-6587

Citi Financial (800) 423-8158

Citi Mortgage (800) 667-8424

Downey Savings (800) 824-6902

EMC Mortgage - Bear Stearns
(800) 723-3004

First Franklin (800) 346-6437

Franklin Credit Management
(800) 255-5897

Fremont Investments
(866) 484-0291

GMAC (800) 850-4622

Greenpoint Mortgage
(800) 784-5566

Home Loan Services
(800) 622-5035

HomEq (800) 414-0969

Household Finance
(800) 333-5848

HSBC (888) 648-3124

IndyMac Bank (877) 736-5556

Land America Lender Services
(800) 909-9525

Litton Loan Servicing
(800) 548-8665

National City (800) 822-5626

Nationstar (888) 480-2432

New Century Financial
(888) 477-0193

Novastar (888) 289-1231

Ocwen Financial (800) 746-2939

Option One (888) 275-2648

Popular Mortgage (866) 361-3460

PHH Mortgage (800) 750-2518

Regions (800) 986-2462

Saxon Mortgage (800) 594-8422

Select Portfolio Servicing
(888) 818-6032

Sun Trust Mortgage (800) 634-7928

US Bank (888) 780-3997

Wachovia (866) 642-8608

Washington Mutual
(866) 926-8937

Wells Fargo (877) 216-8448

Wilshire (888) 841-8795

World Savings (Wachovia)
(800) 642-0257