Maryland home short sale Harford County Realtor Baltimore Specialist. First we need to understand what a MD short sale is. The wikipedia definition “A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan.[1] It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrower.”

A very important point not mentioned in this explanation , you do need to be behind in your mortgage or in foreclosure to be considered for a short sale. For example, you are making your payments on time, everything is good, all of the sudden a mandatory job or military transfer or you lose your job and you need to move to another area to find new employment and your home is now worth less than you owe and you do not have a way to make up the difference. This is one example, but there are many others. The main point is, if you have a hardship and your home sale will not bring enough to pay the mortgage liens in full, you may qualify. All lenders are different, please consult your mortgage company for their specific qualifications and forms.

The most basic thing to understand about the Maryland short sale process is this, you are selling your home and a buyer is buying your home. That process is the same as it would be in a normal sale with one exception to the contract and that is you need third party approval to complete the sale (go to closing). So what does that mean, the only parties to the contract are the seller and the buyer. The bank or mortage company is not a party to the contract, but in order for the contract to go to settlement, the bank, since they are not getting all their money, must agree to the terms.

In other words the seller negotiates with the buyer for the real estate contract terms and conditions, after it is agreed to by all, then the seller submits the contract to the bank and opens negotiations with them if they do not accept the terms as written. As I am writing this I am feeling that these words are making it seemed more complicated than it really is.

It is a fairly simple process, especially now, under new rules handed down to mortgage companies by the Obama administration, also known as “The Home Affordable Foreclosure Alternatives Program”. A process that was taking up to six months, now must be approved or disapproved within ten days. This is huge, because many buyers could not wait that long and sellers were losing in some cases their only opportunity.  The other good news is that an approved transaction must fully release the borrower from the debt, which is one less debate you must enter into with your lender. Prior to this new rule, the borrower may have been required to sign a promissory note for the balance or a portion of it at settlement.

An important point to make is these new guidelines only apply to banks and lenders that are subject to federal banking oversight. That means Chase, Wells Fargo and Bank of America, but not neccessarily you local or state chartered banks who remain free to be as unreasonable as they want in the short sale process. My suggestion is to contact your financial institution as soon as possible if you are considering a short sale. Find out if they fall under the new rule, get their short sale policy in writing along with all of the forms you will need. The more information you have the less you will fear.

There is never a good time to do a short sale, but at the same token, the process has never been better for sellers, buyers, real estate agents and banks alike. If everyone is performing in good faith, in the end each persons goal can be reached with the least amount of loss, pain and frustration.

As always to your success and happiness.

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