Gainesville FL Real Estate Blog

If after exploring all other alternatives such as federal assistance programs, loan counseling and/or modifications, or a short sale, you are still faced with foreclosure, you need to be familiar with that process and what it means for you. The procedure varies from state to state, and your first step is to be aware of the regulations regarding your Gainesville FL home.

There are three types of foreclosures used by individual states, judicial, power of sale, and strict foreclosure.

            1. Judicial is allowed in all states. After the lender files with the judicial system, you will receive a notice for payment. After 30 days with no response from you, the property is sold at an auction conducted by the court.

            2. Power of sale, also known as statutory foreclosure, is allowed in many states if your mortgage contains a “power of sale” clause. In this case, the mortgage company, after sending out the required notices and waiting for an established period of time, carries out the auction of your Gainesville FL home.

            3. Strict foreclosure is allowed in some states and provides for the property, again after the required notices and time period, to revert directly to the lender. No auction is involved. Usually this type of foreclosure occurs only when the amount of the debt exceeds the value of the property.

If you cannot meet your mortgage obligations, the lender must notify you in writing as it proceeds with each step of the foreclosure process, designed as follows:

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Because more than 5 million households are behind on their mortgages, two commonly heard, and sometimes confusing, terms are short sale and foreclosure. This article will define and explain a short sale. Part 2 will examine the foreclosure process, and Part 3 will attempt to compare and contrast the two to help you decide which better fits your circumstances.

Short Sale

A short sale is, in essence, the sale of a home for less than what is owed on the mortgage. This sale is done by you the homeowner, and your realtor, not the lender, and you may continue to reside in your Gainesville FL home until it sells. Such a sale is not an “easy out” for the homeowner, however. The lender (and any investors who own your loan) must agree to the short sale and will often do only so after loan modification alternatives (restructuring the loan) have been fully explored. For obvious reasons, many lenders prefer to forego a few monthly payments or lower your interest rate rather than having to begin foreclosure proceedings and take over the property.

You will have to convince the lender that you are sincere in your desire to make the short sale work and reach a fair settlement. You will most likely have to find a realtor who is willing to work for a smaller commission, contribute any available assets you have to lessen the outstanding mortgage balance, and demonstrate that you have “tightened your belt” by scaling back on your spending. Those things being accomplished, your lender may approve the short sale process in order to take a smaller loss, prevent a lengthy and costly foreclosure procedure, and avoid being saddled with a hard to sell foreclosure property.

Home Affordable Foreclosure Alternative

To further encourage “underwater” homeowners to use the short sale approach and lenders to approve such sales, the federal government has instituted a new program that provides financial incentives to the parties involved. Known as HAFA (Home Affordable Foreclosure Alternative), the homeowner who uses the short sale process could receive up to $3000.00 for relocation assistance, and a maximum of $6000.00 could be available to the lenders/investors serving the mortgage. Under this program, which has not been as successful as originally hoped, the lender will use real estate agents to determine the value of the home and the minimum to accept. If an offer comes in that is equal to or higher than that figure, the lender must accept it.

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There were 1,523 Alachua County and Gainesville FL foreclosure homes in January with 231 new foreclosures, according to RealtyTrac.com. The average foreclosure sales price was $136,586 compared to an average sales price of $163,202, a $26,347 savings. 1 in every 490 housing units received a foreclosure filing in January 2010.

Alachua County & Gainesville FL Foreclosure Activity and Home Price Index

Home price appreciation remained the same in January and the number of new foreclosures totaled  231.

Alachua County foreclosure activity is based on the total number of properties that receive foreclosure filings – default notice, foreclosure auction notice or repossession notice – each month. Home price appreciation is based on month-over-month percentage change of the Home Price Index. The Home Price Index is calculated from home sales records.

Alachua County & Gainesville FL Foreclosure Geographical Comparison

Alachua County foreclosures are 0.05% below national statistics and 0.24% below state figures.

Alachua County & Gainesville FL Foreclosure Activity by Month

The number of Bank-owned properties decreased from 42 properties in December to 26 properties in January. The number of Auctions decreased from 58  to 41 while Pre-foreclosure activity jumped from 155 to 164.

Are you or someone you know behind on your mortgage payments and facing a Gainesville FL foreclosure? You do have options. A short sale may be the answer to saving you, your family and your home. I am a Certified Distressed Property Expert (CDPE). Give me a call for a private consultation.

If you’re thinking of selling your Gainesville home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won’t cover your total mortgage obligation and closing costs, and you don’t have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it. 

1. Consider loan modification first. If you are thinking of selling your Gainesville home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as: 

• Refinancing your loan at a lower interest rate
• Providing a different payment plan to help you get caught up
• Providing a forbearance period if your situation is temporary 

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