4-Temporary Loan Relief Alternatives

Forbearance is an agreement to temporarily let you pay less than the full amount of your mortgage payment, or pay nothing at all, during the forbearance period. Mortgage companies may consider forbearance when you can show that funds from a bonus, tax refund, or other source will let you bring the mortgage current at a specific time in the future.

2. A reinstatement occurs when you pay your mortgage company the total amount you are behind, in a lump sum, by a specific date. This is often combined with forbearance.

3. A repayment plan is an agreement that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period you have gradually paid back the amount of your mortgage that was delinquent.

4. A loan modification is a written agreement between you and your mortgage company that permanently changes one or more of the original terms of your note to make the payments more affordable. Common loan modifications include; a) Adding missed payments to the existing loan balance
b) Making an adjustable-rate mortgage into a fixed-rate mortgage 
c) Extending the number of years you have to repay or forces the sale of a property as a result of the borrower’s failure to comply with the terms and conditions of the mortgage. 

4-Permanent Loan Relief Alternatives
1. Assumption permits a buyer who qualifies with the existing lender to take over your mortgage debt and pay the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.
2. Short Sale If you can sell your house but the sale proceeds are less than the total amount you owe on your mortgage, your mortgage company may agree to a short payoff and then write off the portion of your mortgage that exceeds the net proceeds from the sale.
3. Deed-In-Lieu of Foreclosure your mortgage company may agree to a deed-in-lieu of foreclosure if you agree to voluntarily transfer title of your property to your mortgage company in exchange for cancelation of your mortgage debt. In most cases, you must attempt to sell your home for its fair market value for at least 90 days before a mortgage company will consider this option. This option may be unavailable if there are other liens on your home, such as judgments from other creditors, second mortgages, or tax liens.
4. Foreclosure A legal process in which a lender takes the title or forces the sale of a property as a result of the borrower’s failure to comply with the terms and conditions of the mortgage.

I believe that a Short Sale is the last option that a homeowner has before foreclosure. 
Preserving and protecting homeownership  and homeowner equity is always the first priority!!!


Legal & Tax Advice

Sellers are advised to obtain legal advice regarding the advisability and terms of any short sale agreement with creditor(s) and professional tax advice regarding the tax implications of any such sale.
This process will result in the loss of your home.


1. Can my real estate agent explain the short sale process to me?

Answer: Josh Wittenberg is a qualified short-sale real estate specialists. The entire RE/MAX Metro Atlanta office and my Broker are CDPE certified.
I can clearly and logically help evaluate your situation, explain in detail the short-sale process, and create a strategy.

2. How do I know if my property will qualify for a Short Sale?

Answer: I can help you with the specific guidelines of the short sale process so that your property can be accurately evaluated to address your specific situation.

3. Does my real estate agent know what information I will need to provide to the lending institution?

Answer: I will be able to ask the right questions and provide you with the appropriate paperwork to begin the process of creating a short sale package for the lending institution to review your current financial situation.

. Does my real estate agent know how to create an effective short-sale strategy?

Answer: A short sale will only be accepted by the lending institution if both your property and you meet the lending institution’s guidelines.  Every effort will by made to ensure that you have all of the necessary elements documented to qualify for and complete a short sale.

5. Does my real estate agent know how to market my home, since timing is essential?

Answer: I provide specialized tools for selling your home, including the MLS (Multiple Listing Service), customized websites, caravans, network of supportive agents, several hours a week of prospecting, open houses, market flyers and brochures. Again, because timing is so crucial, we know about advanced technological services and know how to apply them to the sale of your home. Our specialty advertising includes: toll-free hotlines, fax-on-demand marketing, and 24-hour access to information on your home.

6. Does my real estate agent know how to price my home?

Answer: I understand the current market conditions and how the market is affecting home sale prices. We will be able to back up our assertions with solid proof by obtaining a comparative market analysis to include three items: the listing and selling prices of homes in your area, a description of comparable homes, and the length of time the homes have been on the market. This gathered information will give you confidence that your home’s proposed market value is set at an accurate pricing range.

7. Does your real estate agent have a pricing/marketing campaign for 14, 30, and 45days?

Answer: If your home isn’t seeing much interest by prospective buyers after 14 days, my Short Sale Team will promptly be able to provide you with a list of things being done on a regular basis to generate activity. We will provide you with a "Weekly Status Gram" communication vs. you having to continually request updates and make suggestions as to how to sell your home. The Baltimore Home Team has the professionalism and expertise in the short sale market.

8. How do I know if I am really comfortable with the real estate agent I am selecting?

Answer: This is a great question to ask yourself. We have all had times where we went along with a decision because of pressure but knew it wasn’t the right choice. Ask yourself if you trust me and more importantly, if you feel confident in the way I conduct business.   This will also be a reflection of how other agents want to work with me.  I am happy to provide references so that you can be educated with our skill level and expertise in selling your home. You are dealing with a very emotional issue…selling your home. Make sure you are making good business decisions during this trying time. If you decide what I have to offer is not for you, then we'll walk away with no pressure. 

What Is A Short Sale?

A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate agent’s commission. A short sale is an alternative to foreclosure which may benefit both lender and borrower alike. The lender is getting paid back much of the money which it lent to the borrower as well as getting rid of the property. The borrower is getting out of their mortgage without having to go through foreclosure proceedings or expend any more money towards the home. Typically, the lender pays practically all sales costs, including repairs, escrow and title fees and realtor commissions.
How Do I Know If A Short Sale On My Property Is Right For Me?

Because of the current market conditions, mortgage lenders are more willing to work with borrowers faced with a financial hardship by agreeing to the short sale process. If you are faced with a hardship and are unable to meet your financial obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through the foreclosure process.
If I Do A Short Sale, What Do I Have To Pay To Sell My Home?

In most cases, you will pay literally no sales costs if your lender approves the Short Sale. The agent commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the Short Sale approval. In most cases, the amount the lender reduces the sellers’ payoff is considered to be “forgiveness of debt.” This amount is normally taxable. Only a tax professional can make this determination, but expect to receive a 1099 on the amount forgiven by the lender as income for you to be taxed on for the year in which you closed the property.
How Do I Get Started On The Short Sale Process

There are very specific categories that lenders consider “qualified hardships.” A short sale can only take place if both your property and you qualify . You will need to make sure you are working with an experienced short-sale transaction management team so that you will increase the odds of having your lender accept the proposed short sale with your first request. Not all lenders will accept a short sale. Experienced negotiation is the key.
What “Hardship” Is Acceptable For A Lender?

Below you will find a list of “hardships” that are frequently accepted by mortgage lenders:
1. Job relocation
2. Unemployment
3. Significant income loss
4. Divorce
5. Separation
6. Excessive medical bills
7. Death of spouse
8. Death of a family member
9. Business failure
10. Damage to property
11. Incarceration
12. Military service
13. Adjustment in mortgage payment or unforeseen increase in living expenses.
Most mortgage companies or lenders require the hardship letter pursuant to a short sale. In the hardship letter, it is important to present the facts clearly, and above all else, be honest. The hardship letter must be able to prove the situation that caused you to fall behind on your payments and the excuse for falling behind must be legitimate and provable. A hardship is defined real and the mortgage company believes the loan is likely to become delinquent.
Do My Mortgage Payments Need To Delinquent?

Most lenders will turn down your request for a short sale if the seller is currently making the payments. The only time they will consider it a short sale, is when the seller’s payments are delinquent. This presents a particularly difficult dilemma for the seller. Sellers who keep their payments current are protecting their credit rating, but the lenders require delinquency to do a short sale transaction.
I Have Two Loans; Can I Still Do A Short Sale Transaction?


Yes. We will have to work with both lenders to put together a Short Sale transaction packet. Most sellers in this situation are usually successful at getting the two lenders to cooperate because neither lender wants to own another home through foreclosure.
I Am Concerned About My Credit-How Will A Short Sale Effect My Credit?

Late payments leading up to a Short Sale will negatively impact your credit.  Much depends on how the lender reports the Short Sale to credit rating agencies such as Experian. However, if your bank accepts a Short Sale and does not negatively report, the short sale will not in itself negatively impact your credit score. For sellers, the key advantage to selling in a short sale is avoiding foreclosure. A short sale does less damage to a person's credit report than a foreclosure. It’s also less detrimental than a “deed in lieu” (of foreclosure), in which a borrower gives the lender the keys to the house and stops paying the loan.

Seller Homework


List of Required Documentation For A Short Sale
In order to complete a Short Sale request, your lender will typically ask you to complete a Hardship Package that will need the following included in it:
•A Hardship Letter explaining cause of current financial situation.
•Financial information (Monthly Financial Statement).
•Last 2 years federal tax returns.
•Last two months’ pay stubs.
•Last two months’ bank statements.
•If there is more than one mortgage or line of credit connected to this house, they will need
information on all the mortgages.
•If you are in Chapter 7 or Chapter 13 Bankruptcy Proceedings, a letter from the Federal
Bankruptcy Trustee allowing the sale of the property is Mandatory. If you are discharged under
Chapter 7 liquidation proceedings, a copy of the Discharge letter is mandatory.