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Thursday, May 10, 2012

Facing Foreclosure? A Short Sale may be the best alternative

Foreclosure is a process where the lender takes action to recover the amount owed on a defaulted mortgage by selling or taking repossession of the property guaranteeing the loan.

A short sale is a process where a home owner sells the property for less than the money owed on the mortgage (short of the mortgage).

You have a choice...a short sale or a foreclosureWhich do you take?

Neither is good for your credit.   Of the two, having a short sale on your credit report is the lesser of the two evils.

Short sales provide a way for a home owner facing a real hardship to sell their home and get out from under an upside mortgage.

But short sales take time.  Foreclosures take time in Florida as well but the consequences are greater.

[Read this lawyer stuff.. I am not an attorney nor do I play one on TV.  Consult an attorney for legal advice.]

The key to a successful short sale is the existence of a real hardship.  Short sales just because you are upside down on your mortgage is not the same as a loss of job, an illness, death in family, job transfer or similar situations.  You never know though as it is the lender who decides whether to accept your reason for selling.

Of course the short sale process will require documentation which includes all of a seller’s assets as well as debts.  Having a stash of funds in the bank may not pass the lender test although they may still approve the sale with some seller contribution.

The key to a short sale…get an offer to purchase your home and then negotiate for a workable solution.

If you are facing hardship and a foreclosure may be in the future contact me to discuss the possibility of a short sale.

The key is to understand your options before the bank makes the choice for you…a foreclosure.

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