If you are facing foreclosure and are underwater on your mortgage (the market value of your property is less than what you owe on your mortgage), you may be eligible for a short sale. A short sale is an avenue for a homeowner to avoid foreclosure by selling his home for less than it is worth. It is also an avenue for the lender to mitigate their losses by gaining cash for the property (although less than what is due under the mortgage) with the homeowner’s cooperation and assistance. Most lenders prefer working out a short sale rather than foreclosing, because it saves them time and money.
The time frame for a short sale usually depends upon how quickly you receive an offer on your home and how quickly you are able to supply the lender’s requested information . Your lender will require disclosure of your financials and order an appraisal or BPO on your property to determine the terms of the short sale. The best case for homeowners is for a lender to waive any and all deficiency on the loan. However, this is not always easily negotiated. Other factors the lender must consider are whether you have a second mortgage or HELOC on the property, outstanding HOA fees due, outstanding property taxes, Mortgage Insurance, and any other liens on the property. These factors can bring added complexity and potential roadblocks to a successful short sale.
If you would like to learn more about short sales or other foreclosure options, we invite you to meet with one of our attorneys. We will help provide you with the information you need to reach your long term goals and use our experience in negotiating short sales and other alternatives to foreclosure to help you attain the best possible outcome.