STEVE:  Hi.  Thanks again for watching my video blog this week.  This week, I want to talk to you a little bit about what short sales are.  Those that are in the marketplace probably hear about it and read about it, but they go, “What is a short sale and what do I do when I’m upside down?”  Well, basically, a short sale is a homeowner that’s short on the amount that he’s owed on the property.  So for instance, if you purchase the home for $200,000 in 2006 and got $190,000 mortgage, we’ve seen a decline in values in the real estate market so that it has gone below the 190,000 mark.


And many owners cannot afford their property.  And we’ll talk about how you apply to see whether or not you can have a short sale.  Well, what are the choices that you have when you’re upside down on a property, where you owe more against the property than you have?  And there are several things that you can do.  Number one, you could have a reinstatement of your property where you’re having problems on it and behind in payments and you can go to your lender and ask for a reinstatement.


 The second thing that you can do is you can ask for a forbearance or a repayment plan where you say to your lender, “I’ve been struggling.  I need some help.  Can we come up with a new repayment schedule or some type of forbearance?”  A big thing that many people have heard about is a loan modification.  A loan modification is where you go in to your lender and you say, “Well, I have this adjustable rate mortgage.  It’s coming due with a new interest rate.  I can’t afford the payment that it’s coming due with.  And my property values have dropped.  What can we do to modify this loan so I continue to stay in the house?”


The next one is—and some people have done—they just go out and say, “Well, I’ll just rent my property until the marketplace comes back.”  So the rental of your property.  You can do that and I’ve had some customers and clients that have chosen to rent their property and then go buy their next property.  Another one is called a deed in lieu of foreclosure.  That’s where you go to your lender and you’d say, “Well, I know you’re trying to foreclose on me because I’m behind on my payments, but I’m just going to give you a deed and I’m going to give you the deed in lieu of foreclosure because I’d rather not go through the whole foreclosure process.


The next one, which is an ugly one, is bankruptcy.  And that’s where I would tell you to talk to an attorney about that.  Even dealing with a deed in lieu of foreclosure you would do the same thing.  Another one is to do a refinance where you go in and refinance the mortgage and try to rework that whole process.  The next one is there is a Service Members Civil Relief Act that was put in place by the Congress that you can look at.  And the last thing that people are looking at today is doing what’s called a short sale where they say, “I want to sell my property.  I’m upside down in it.  What do I do?”


In order to do a short sale, there’s basically three things that you have to do to qualify for these, and I’m going to suggest that there would be more of a time where if you had questions about that where you’d come into my office and we’d talk about the specifics of it.  But the three things are: One is a financial hardship.  That your hardship has happened.  Maybe you’ve lost a job.  Maybe you’ve had a medical situation or your savings have been declined and the property is upside down.  Or you’ve been transferred and you can no longer live in the home and you’re going to have to move to another state where you cannot continue to hold onto this property.


The second is a monthly income shortfall.  That shortfall means—and many people have seen this where one of their spouses maybe lost a job or maybe had to be re-employed and your employment amount was a lesser amount.  And the third one is insolvency.  Insolvency is where they just see you don’t have enough assets and things to continue to pay on the mortgage.  Now these are all very difficult things.  We’re dealing with these kinds of processes in the marketplace.  My heart goes out to every individual that’s going through this and I feel so bad.  You’ll see as we put up on the screen that I have a website that specifically helps you through reading some of the preliminary information and even a video on there by David Knox [04:33] who does even a greater explanation of the short sale.

 The name of it is  Please go view it.  Thanks for watching it this week.  Next week I’m going to bring in an attorney who’s going to talk more specifically on short sales.  Have a great day.  Bye.