Hawaii Short Sale Questions & Answers
Do I Qualify for a Short Sale in Hawaii?
The qualifications for a Hawaii short sale include any or all of the following:
- Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
- Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
Why Should I Consider a Short Sale in Hawaii?
The Short Sale happens in Preforeclosure stage. If the short sale is successful, the seller escapes foreclosure and the corresponding hit to their credit report. They only sustain smaller hit on their credit report for any missed payments and the short sale.
Why Your Bank Gets Financial Benefits by Forgiving You?
Simple. It is Expensive for the lender to foreclosure a home in Hawaii. Some of the lender’s costs could include Legal fees, Insurance, Taxes, Eviction cost, Selling cost, etc. On average, it costs as high as $50,000 per foreclosed property. Their business is Loaning Not, Owning!
What is a Loan Modification?
A mortgage modification is a process through which your mortgage lender changes any or all of the following:
- Your interest rate
- Your principal balance (through a reduction)
- Your loan terms (example: from an adjustable to a fixed rate)
This process can allow borrowers to stay in their property when they can no longer afford their current mortgage payments.
Why Would a Lender Modify My Mortgage?
Lenders have realized that in some cases it is better for them to work with current borrowers to lower payments or possibly improve terms in order to keep homeowners in their properties. The average foreclosure can cost a lender from 35-50% of the value of a property, so keeping borrowers in their homes is a good option for everyone.
What do I need to qualify for a Mortgage Modification?
According to the Making Home Affordable Web site, you will need the following information for your lender to consider a modification:
- Information about your first mortgage, such as your monthly mortgage statement
- Information about any second mortgage or home equity line of credit on the house
- Account balances and minimum monthly payments due on all of your credit cards
- Account balances and monthly payments on all your other debts such as student loans and car loans
- Your most recent income tax return
- Information about your savings and other assets
- Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources
If applicable, it may also be helpful to have a letter describing any circumstances that caused your income reduce or expenses to increase (job loss, divorce, illness, etc.)
How Do I Qualify for a Loan Modification in Hawaii?
The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):
- Loss Mitigation
- Mortgage Modification
- H.O.P.E.
Prior to contacting your mortgage lender you can quickly complete an eligibility test at www.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP).
What if I DON’T Qualify for Loan Modification and Refinance, CAN’T Afford My Home, and Owe MORE than it’s Worth?
You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Our Hawaii Short Sale Real Estate Agents with the Certified Distressed Property Expert® and SFR (Short Sales and Foreclosure Resource) certified will help you sell your home in a short sale in Hawaii and give you fresh start!
A short sale allows you to sell your home for less than what you owe and avoid foreclosure. In addition to that you may be qualified for receiving a relocation money, $2,000 to $5,000.
Can I Lease Out My Home While Waiting on Short Sale in Hawaii?
We don’t recommend that you lease your home while waiting on the short sale to be finalized. Lenders will not be sympathetic to sellers who are collecting rent payments and not making their mortgage payment. Also, homes with tenants are subject to legal rules (tenant rights) and much more difficult to show and to sell.