Friday, November 18, 2011

Facing Foreclosure? Let me help!

Is Your House Underwater?
Recent national statistics indicate that one in seven homeowners currently owns a distressed property. These are homes that have either gone through foreclosure or are being marketed as "short sales." In a short sale, the homeowner can't afford to maintain the mortgage, but the lender - rather than foreclosing - agrees to the sale of the property for less than the balance of the loan. As an attorney, the combination of my law firm’s experience in real estate, title and bankruptcy has culminated in spending a great deal of time advising homeowners, who owe more on their mortgages than their homes are now worth, what options they have in this real estate market. I recently spent several days in Massachusetts becoming certified as a distressed property expert and remain one of the few attorneys in Maine to currently hold that designation to assist distressed homeowners with foreclosure alternatives at no cost to them.

A Certified Distressed Property Expert® (CDPE) has a thorough understanding of complex issues in today’s turbulent real estate industry and knowledge of foreclosure avoidance options available to homeowners. CDPEs can provide solutions, specifically short sales, for homeowners facing market hardships who regularly proceed without guidance of any kind through the often financially and emotionally devastating prospect of foreclosure. Through comprehensive training and experience, CDPEs have the tools to help homeowners find the best solutions for their unique situations and to avoid foreclosure through the efficient execution of a short sale. There are multiple benefits to utilize the short sale process as an alternative to foreclosure. If you are currently facing this challenge, please go to our website for more information. 
Foreclosure v. Short Sale Comparison


(1) Future Loan with any Mortgage Company
  ---  FORECLOSURE ---

On any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed-in-lieu thereof in the last 7 years?” This will affect future rates.
    ---  SHORT SALE ---

There is no similar declaration or question regarding a short sale.

(2) Credit Score

Score may be lowered anywhere from 250 to over 300 points. Typically will affect score for over 3 years.
Only late payments on mortgage will show, and after sale, mortgage is normally reported as “paid as agreed,” “paid as negotiated,” or “settled.” This can lower the score as little as 50 points if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months.

Current & Future Employment
Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination. Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment.

A short sale is not reported on a credit report and is therefore not a challenge to employment.

Deficiency Judgment

In 100% of foreclosures (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment.

In some successful short sales it is possible to convince the lender to give up the right to pursuit a deficiency judgment against the homeowner.

Author: Mary-Anne E. Martell, Esq., is Senior Legal Counsel and Founder of Seacoast Law & Title located at 1399 Bridgton Road in Westbrook. The firm specializes in real estate, bankruptcy, business, family, estate planning and title closing services.  Mary-Anne welcomes comments or questions at, (207) 591-7880 or on their website,

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