Integrity First Financial

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Short-Sale FAQs

1) What is a short sale?

A short sale is an agreement with a lender to accept less than the amount owed by a borrower via a sale of the property to a third party. With this agreement, the lender releases the borrower from the mortgage, thereby preventing foreclosure. A Short-Sale is also known as a real estate short pay-off or a pre-foreclosure workout,

2) How do I qualify for a short sale? What criteria must I meet to be considered in a “hardship” situation?

In order to be eligible for a short sale, a homeowner must be able to prove to the lender that they are a victim to a “hardship” and are therefore unable to continue making payments on their mortgage.
A hardship situation is one that is the result of some extenuating circumstance that forced the borrower into a position where they can no longer afford their mortgage payments.

3) When should I begin the short sale process?

As soon as you possibly can. Foreclosure situations tend to be extremely time sensitive. The sooner we can begin the negotiations with your lender, the greater the chances of a successful resolution. Time is of the essence!

4) How much will a short sale cost me?

Absolutely nothing. Unlike other loss mitigation companies, Integrity First Financial Services, LLC provides our services at no cost to the homeowner. Our fees are never paid by the homeowner, and we are only compensated if we successfully negotiate a short sale. Please contact us today for a free consultation with one of our specialists.


5) How long does a short sale typically take to complete? Can the process be expedited if I am imminently facing foreclosure or an auction date
has been set?

Every short sale situation is unique and follows its own timeline. Typically a short sale is completed within one to four months from the time we submit your financials and executed contract to your lender. Having said that, we have successfully negotiated a short sale in as little as two weeks. Timing depends on how quickly we can begin negotiating with your lender. If you are imminently facing foreclosure or even if an auction date has already been set, the process can certainly be expedited and we have even had lenders postpone the auction date. Please contact us today for a free consultation with one of our specialists so that we can be of immediate assistance to you.

6) What effect will a short sale vs. a foreclosure have on my credit?

A foreclosure can remain on your credit for up to seven years while a short sale usually gets reported as a settled debt and reports on your credit for 2 years. With a short sale, your FICO score will not be as negatively impacted as it would be with a foreclosure, and you will be able to get into a new home much sooner as well.
Integrity First Financial Services, LLC is not a credit counseling agency, but credit experts say that a foreclosure will typically reduce a borrower’s FICO score by 250 to 280 as compared to a Short-Sale reducing your FICO score approximately 80 to 100 points. Short-Sales have significantly shorter waiting period before buying another home, usually about 24 months.

7) What is my potential liability after completing a short sale?

Tax ramifications: After completing the short sale your lender may decide to issue you a 1099 for the difference between the price your home sold for and what you owed. This deficiency can later be taxed by the IRS on this amount as income.
Integrity First Financial Services, LLC does not give tax advise but it is important to note the Mortgage Forgiveness Debt Relief of 2007, amended to 2009, details certain criteria that will make the tax liability exempt on Primary Residences and possibly on investments under strict provisions. We suggest you speak to an accountant to see if you qualify for these exemptions.

8) What is a deficiency judgment?

“Deficiency” is the difference between the payoff the lender accepts as “Short” and the current balance you owe. A “deficiency judgment” makes you personally liable for the remaining amount owed to them above the short sale price.

9) Can a deficiency waiver be negotiated with my lender?

Yes, Integrity First Financial Services, LLC and the Attorney’s at Bressler-Duyk Law Firm will negotiate with your lender to have them agree to cancel the entire deficiency balance. We will negotiate for the release of both the property lien and the underlying personal debt secured by the note. If you fail to do this, the lender may not forgive the personal debt and it will become a collection. releasing you from the
When dealing with your lender, Integrity First Financial Services, LLC will aggressively pursue a short sale and deficiency negotiations in your favor. Don’t leave the job to an inexperienced amateur.

10) Why would my lender agree to a short sale?

A short sale gives the lender the ability to cut its losses upfront thereby avoiding the expense and time of a foreclosure and potentially greater losses. Lenders want to make loans, they do not want to be in the business of owning and managing real estate. Whether the lender chooses to go through with a foreclosure or agree to a short sale, they are taking a loss either way. In many cases they would take less of a loss with a short sale and resolve the matter in a comparatively shorter time frame. In nearly every case, a short sale offers a better return on the lender’s investment than a foreclosure does.

11) Why shouldn’t I negotiate with my lender directly?

Most lenders’ loss mitigation departments are understaffed, and the overworked loss mitigators are usually overloaded with all parties vying for their attention. Unfortunately, the loss mitigator can be very difficult to get a hold of, and when you finally do get through, you have very little time with which to make your case. Furthermore, the added stress of foreclosure in itself makes it difficult for a homeowner to effectively and calmly negotiate their way out of foreclosure. At best, you only get one shot to negotiate your way out of foreclosure, and while it is certainly possible to negotiate with the lender yourself, it is highly unadvisable.

12) How does filing for bankruptcy impact my ability to do a short sale?

Integrity First Financial Services, LLC can still help negotiate a short sale with your lender even if you file for bankruptcy protection. However, in our experience, bankruptcy is usually employed only as a last resort in a foreclosure situation. Typically, filing for bankruptcy only temporarily delays the foreclosure process. Eventually the property is sold to satisfy debts to creditors. We strongly urge you to seek the advice of a bankruptcy attorney if you are considering this option.

13) Can Integrity First Financial Services, LLC help me with my government backed (or insured) mortgage?

Absolutely! Integrity First Financial Services, LLC is experienced in negotiating all kinds of government loans, including FHA or VA owned mortgages and Fannie Mae / Freddie Mac insured mortgages, as well as privately insured mortgages. We are highly proficient in all of the specific rules and regulations governing the acceptable short payoffs of these mortgages.

14) Why should I use ALM to help me?

Integrity First Financial Services, LLC is a national leader in the field of short sale negotiating. Our principals and staff have decades of combined experience in all areas of the mortgage and real estate industries. Our expert loss mitigation specialists are highly trained and thoroughly knowledgeable in every aspect of this often complicated process. Our expertise and experience is what differentiates us, our commitment to our clients is what sets us apart.
Integrity First Financial services, LLC specializes in loss mitigation and effectively presents the information that lenders require to seriously consider a loss mitigation solution such as a short sale.

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INTEGRITY FIRST FINANCIAL SERVICES, LLC © 2010
60 Lincoln Highway, Edison, NJ 08820
Tel: 732-662-9780 | Toll Free: 866-963-6443 | Fax: 732-662-9781

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