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Friday, May 17, 2013

Short Sale, Loan Modification, Foreclosure - Distressed Home Owners Have Choices

Short sale, loan modification and foreclosure offer distressed home owners experiencing problems meeting their mortgage obligation multiple choices for a solution.

Important disclaimer:  I am not an attorney. I do not provide legal advice.  If you have questions regarding the legal or tax implications relating to a short sale or foreclosure, consult the appropriate professional.

Each of these routes, in my opinion, has positives and negatives.

A short sale is a situation where the probable selling price will be less than the mortgage(s) owed.   Short sales require any offer accepted by the owner be forwarded to the lender for approval (referred to as third party approval).

Sellers pursuing a short sale usually are facing some hardship such as job loss, death in family, employment transfer including military transfer, etc.  Short sales take longer than a standard sale.  Still a short sale is preferable to a foreclosure on your credit report.

Foreclosures (as well as short sales) can result in a deficiency judgment.  If foreclosure is a possibility - consult an attorney.

As for loan modifications - talk with your lender.  They may work out some arrangement to temporarily address your hardship.

Still, I have seen some failed loan mods because the terms offered by the lender were not realistic.  The reality is sometimes the owner should have never been the owner. 

Who is at fault when home owners face short sale or foreclosure?  Dealing with the issue at hand does not involve finding fault.

If you are facing a hardship and a short sale is an option, please feel free to give me a call or send me an email if I can help in any way.

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