Short Sale Guide

Who is Default on Purpose and what do we do?

Default on Purpose is a group of real estate and legal professionals who provide information, options, and solutions to homeowners who owe more than their house is worth. The legal, tax, and credit ramifications add a layer of complexity that prohibits most real estate agents from providing a comprehensive evaluation of a specific homeowner’s situation and options. Default on Purpose provides free legal counsel with a real estate attorney who will explain every option available to you. Since every homeowner’s circumstance is unique, we help plan and execute the strategy that is best for that individual.

A short sale is the sale of home in which the proceeds are not sufficient to meet the mortgage debt obligation. Short sales have become the preferred option to avoid foreclosure.

When to short sale:

• The property’s value has dropped so that the market value is less than what is owed on the mortgage (also known as underwater and over leveraged).
• The mortgage is in or near default status – banks typically lose less money on a short sale than a foreclosure.
• Seller has encountered a hardship. Examples of hardships are job loss, reduction in pay, or medical emergencies.

Save Our Home AZ:

• Offers mortgage reinstatement and payment assistance programs.
• Offers principal reduction assistance to qualified homeowners.
• Offers up to $4,500 in relocation assistance for short sales and in addition will assist in paying off additional mortgages. If combined with HAFA, will provide a total of up to $4,500 minus any HAFA funds received.
• Will assist in paying buyer closing costs up to 3%.

HAFA Program:

• HAFA stands for Home Affordable Foreclosure Alternatives (HAFA)
• Completely releases you from your mortgage debt after selling the property.
• Provides up to $3,000 in relocation assistance.
• Has a less negative effect on your credit score.

We take all of our clients through this program first, if possible.

FHA/VA Programs:

• The HUD department offers a pre-foreclosure short sale program and relocation assistance from $750-$1,000 to complete a short sale.
• Government loans such as FHA and VA are time consuming and sometimes difficult to navigate, depending on the lender.

Bank Specific Co-Op Programs:

• Several banks have co-op programs that will pay anywhere from $2,500 – $30,000 to do a short sale.
• The process is a little different than a traditional or HAFA short sale. Contact us today to see if you qualify.

Items to understand about short sales:

Arizona law allows homeowners to short sale their properties and be forgiven on the outstanding debt. However, not all homeowners are protected under this law. By meeting with us for a FREE CONSULTATION, we can learn more about your individual situation and assess whether or not you are covered under the law.

Tax consequences – because of The Mortgage Debt Relief Act, homeowners are able to avoid paying taxes on the forgiven debt. Again, restrictions apply – by consulting with us we are able to determine if you will be required to pay taxes on the forgiven amount.

You can receive $3,000 for short selling – The federal government recently passed the Homeowner Affordable Foreclosure Alternatives (HAFA) program. HAFA streamlines the short sale process and gives incentives to banks and homeowners. Homeowners are able to receive $3,000 for relocation expenses from the federal government. Sign-up here to learn of other programs that can pay you up to $30,000 to short sell!

Our short sale services are FREE – We offer our free consultation services because we believe every homeowner has the right to understand their situation and be presented with alternatives and solutions. We are on pace to perform 600 short sales this year, and have never charged a single cent to a homeowner.