A seller who is attempting a short sale will likely have to demonstrate (and document) a legitimate hardship – not just the loss in market value. Although I read on one attorney's website that if your home's value has drastically declined, continuing to pay off the mortgage may amount to throwing money away or something to that effect.
[I am not offering legal advice as I am not an attorney.]
What constitutes a hardship will depend on the lender but, in my opinion, I think things like
- a long term job transfer,
- loss of employment,
- a death in the family,
- major illness of mortgagor,
- loss of income (reduced salary),
- excessive obligations,
- incarceration…well you get the picture.
And, if approved, what will come of the difference between selling price and mortgage amount? It all depends on the lender. The good news is a short sale will result in less damage to your credit than a foreclosure.
Viera and Rockledge, Florida homeowners, call me at 321-693-3850 if you are in a situation where a short sale might be appropriate.
If you prefer email me with any questions you may have about short sales in Brevard County, Florida.