Heard of a short sale but not sure if it is right for you?
Our attorneys can you learn the ins and outs of a short sale. We have many years of experience helping families out from under the threat for foreclosure and find a solution that works for them.
What Happens When I Default
When you default on your mortgage there are several ways a lender can pursue collection on the default accounts. In a foreclosure, your rights to ownership are forfeited and the lender takes possession of the property. Some lenders may approve a deed in lieu of foreclosure,where you voluntarily surrenders the title of the property to the lender in efforts to satisfy the debt owed.
In a short sale, you sell the property in attempt to pay off your debt and the lender agrees to accept less than the amount owed on the loan. When a home is sold for less than the amount owed on a loan, the remaining amount is called a deficiency balance. After a short sale, you are no longer responsible for the debt and the deficiency balance on the loan eliminated by the lender. In a short sale, the deed remains with the borrower until the home is sold and is not transferred to the lender, as in a deed in lieu of foreclosure.
Advantages of a Short Sale
A short sale stops a foreclosure proceeding on the home and allows you to sell the property to another individual. The process can be tedious in that the lender will requires you to prove that multiple offers have received on the property before they will agree to a short sale.
If the property is worth less than the amount owed, a short sale provides the lender with advantages of recouping the majority of the loan debt and losing only the remaining deficiency balance. In other words, the lender will lose only the balance of the loan minus the sale price of the home. For example, if you owe $200,000 on your home and you sell your home for $190,000, the lender will lose $10,000 in a deficiency balance. In a foreclosure, there is no guarantee the lender will recoup anything near $200,000 and could end up losing much more than $10,000 deficiency balance.
Still not sure if it is right for you? No problem!
Our attorneys are experienced in mortgage modifications and have helped hundreds of families find the best option. We never advise you to choose an option unless we are 100% sure it is the best option for your unique financial situation. The Lee Law Firm is aimed at providing personalized services tailored to your needs!