Imagine being unable to pay your mortgage for a few months due to unemployment, a prolonged illness, a divorce or change in relationship. The bank notifies you about being overdue, there are threats of legal action, and no good options appear on the horizon. Or, what if you need to sell your house but, because of market changes, you owe more than the house is worth and you cannot make up the difference. Are you stuck? Many in the Triangle have faced these very troubling issues recently.
We at Coldwell Banker Howard Perry and Walston encountered so many of these situations it became clear that homeowners and their real estate agents needed expert guidance and support. Many sellers feel isolated, like they are the only one facing this situation, or they fear they will be thrown out of their homes.
With the many legalities involved in negotiating debt, we wanted to offer our agents and clients a program that would assist them in the most effective manner. I worked with Roger Bernholz, our firm’s general counsel, and local real estate attorney Andrew Cookson of Gurley & Cookson, PLLC, to develop possible solutions. Working together, the Short Sale and Foreclosure Assistance program, or SAFAssist, was created to provide short sale legal representation and foreclosure assistance to clients through legal advice, document preparation assistance and expert lender negotiations.
With SAFAssist, an independent and experienced real estate attorney advises the participating homeowners and negotiates on their behalf and works to help the client with the reduction of long-term effects on debt liability and in understanding income tax ramifications. Advice on managing any threatened foreclosure to allow time for a private sale is also provided. Most importantly, there are no out-of-pocket expenses to property owners or agents, as costs are paid only through sale proceeds.
SAFAssist provides aid for sellers and their listing agent when involved in a short sale or foreclosure. For our clients, the program attorney communicates directly with the home owners and looks out for their best interests, provides guidance, industry insight and a third-party perspective to effectively close sales within the window of allotted time. For our agents, concentration can be centered on listing and selling a home rather than being saturated in the details of the process.
We began work on the program in October and unveiled it to the public in December. Since the start of January 2011, SAFAssist has been overwhelming in its popularity, with files on 164 short sale and foreclosure properties handled in the program’s first six months alone. It is truly amazing how many people have benefited from the program, as we have represented clients with homes valued from the $100,000s to million-dollar range. Members of our staff have even met people in their day-to-day routine who learn about our program and want to participate.
SAFAssist targets three specific cases – short sales, foreclosures and foreclosures where a short sale is needed. In almost every instance, private sale of the property is a superior alternative both for the home owners and the lienholders involved. A short sale is the best option to help clients, as their credit score will be more protected than in the other two instances, and there are FHA loans available for them to purchase a home in the future. In the worst case of a foreclosure with short sale, we aggressively market the house for sale to prevent foreclosure by a bank. Generally, this yields a better outcome for the bank as well as the homeowners. Some SAFAssist participants have not defaulted on their mortgages, but they are “underwater” on their debt and must sell now, and they realize SAFAssist can benefit them.
This program is offered only to clients who list their homes for sale with a Coldwell Banker Howard Perry and Walston agent. As long as there is a need for SAFAssist, we will continue to provide it for our customers.
Karen Ross is the SAFAssist program coordinator at Coldwell Banker Howard Perry and Walston. For more information on SAFAssist, visit www.safassist.com.