Q. I am underwater on my house and I would like to try a short sale. I'm not sure how to start. Mostly, I'm not sure how to price the house. Will my mortgage company tell me what to list it for or at least tell me the least amount they will accept? I don't see the point of going through all this if at the end, my mortgage company says the offer is too low.
A. I am not aware of any lender that will give you a bottom line figure they will accept in a short sale. The best you can do is list the property at a fair price based upon what similar properties have sold for in your area. Hopefully you will receive an offer somewhere near your listing price.
Once you and the prospective purchaser have reached an agreement on terms, contact your mortgage company and request to speak to someone regarding a short sale. Most lenders will send you a list of items you must provide prior to their considering the offer.
Sometimes, the lender will submit a counter-offer that the purchaser may accept, reject or counter again.
Some good news regarding short sales is that new laws have been passed affecting many if not most federally insured loans. The new rules require the lender to respond to the offer within 30 days. This is great news to everyone involved in short sales as almost everyone involved in short sale transactions can tell you, many of these transactions die as a result of the seller's lender either taking too long or outright failing to respond to the offer.
Q. I have a friend whose house is being foreclosed. He showed me something called a "Judgment for Foreclosure" that was mailed to him a little while ago. He is out of work and can no longer make his mortgage payments.
He is afraid now that someone will come to the door at any time and throw him out. I keep telling him I don't think it works that way, but I have nothing to back that up. Does he have any rights left now that it appears the foreclosure is done?
A. First, the foreclosure may not be done. If the Judgment for Foreclosure is less than 30 days old, it is possible to have it vacated. You would probably need to speak to an attorney if your friend would like to consider this option.
If he has thrown in the towel and just wants to know how much time he has, the Illinois Mortgage Foreclosure Law provides a redemption period which is the longer of three months from the date judgment was entered or seven months from the date he was served with the Complaint for Foreclosure. The lender cannot take any action until the redemption period runs out. The purpose of the redemption period is to provide the borrower an opportunity to either refinance, sell the property or otherwise pay off the mortgage.
So, if the judgment was entered a month ago, he has at least two months left before the lender can take any action. If he was served three months ago, he has at least four months left.
Once the redemption period runs out, if the homeowner refuses to vacate the property, the lender will generally file a simple eviction action, which, of course, buys the borrower even more time.
• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to email@example.com or call (847) 359-8983.