The process of foreclosure can be rapid or lengthy and varies from state to state. Other options such as refinancing, short sales, alternate financing, temporary arrangements with the lender, strategic walk-a-ways, stopping the sheriff sale, bankruptcies, emergency funds (EHLP, HAFA, HOPE NOW, HAMP), cash for keys, predatory lending, RESPA and TILA violations, forensic loan audits and litigation may present homeowners with ways to avoid foreclosure and protect their assets.
Why would a short sale be an alternative over a foreclosure, but not always a good solution?
A short sale is the sale of a house for less than what the owner owes on the mortgage. If you owe more than your house is worth and can’t afford your payments, you might be able to sell it for less than you owe. If the lender agrees to a short sale, the rest of the homeowner’s debt can be forgiven this is where homeowners must get legal advise and take added precautions, especially in event of a second mortgage or line of credit. Lenders sometimes agree to the procedure in order to take a small loss and avoid the lengthy and costly foreclosure process. While there are some significant negative consequences to a short sale, an ever-increasing number of properties are being advertised with that label. While it may seem surprising that lenders would agree to accept less than what they are owed, they benefit in numerous ways by not having to go through the protracted process of foreclosing on the borrower.
- The seller can be released from the mortgage liability without facing bankruptcy.
- The seller has no cost to the transaction.
- The bank pays all closing costs and commissions.
- The seller is in control of the sale of their home.
- The seller benefits on their credit vs foreclosure.
- The seller can be in the position to buy a home again in less than 3 years.
- The seller can receive $3000.00 in moving expense from participating lenders.
- The buyer gets the home at a reduced price.
- The lender agrees to a loss it considers minimal without going
through a foreclosure and being saddled with an unsalable property.As a Minnesota Realtor Peg encourages Homeowners to really investigate alternative options such as a forced modification or litigation that has been proven less costly then losing your home. If you consider the cost of becoming a renter, losing your homeowner tax deductions, the stress of relocating and the cost of rent, moving and then participating in everyday cost of rising rental properties. You may want to consider your options.
Every foreclosure situation is different and is in need of a blueprint to a soft landing a short sale may be a last resort. Peg is more concerned in seeing clients and customers strategically stay in their homes or walk away to benefit the client and customer not the realtor or the bank, which may include a short sale but preferably save their homes.
For More Information
Peg Crumpton has many years of experience dealing with foreclosures, bankruptcies, short sales, forensic loan audits and loan modifications with cutting edge Information and free consultation on what you need to know about solutions to: foreclosures, loan audits, under water mortgages, stopping a sheriff sale, loan modifications, modification denied, bankruptcies, repairing your credit and protecting your assets.
For more information Contact Peg for a free, no obligation consultation.