If your income has been drastically reduced or if your mortgage is no longer manageable and you are unable to pay, a short sale may make sense in your case. Can you find a buyer ready to buy your home but for less than you owe on your mortgage? Both you and the bank are aware that your home may be worth less than when you bought it. If the bank approves the sale (and you must have their approval), you may be able to arrange a short sale that satisfies your mortgage obligation. This is a great alternative to foreclosure because it reduces the costs of additional fees and costs to both the borrower and lender. Although both short sales and foreclosure negatively impact your credit, you will not have a foreclosure on your credit history, thereby making it easier to rebuild your credit to a high score in a shorter period of time.
A Short Sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by the mortgage lien against the property. Upon approval the lien holders (typically a mortgage lender) will agree to release their lien on the real estate and accept less than the amount owed on the mortgage. Any unpaid balance owed to the lender is known as a deficiency and this deficiency will be owed by the borrower unless the lender agrees to release the borrowers from their obligations to repay any deficiencies of the loans. At Babi and Sanfield, our attorneys have had great success in negotiating successful releases of deficiency balances owed. In addition we work with a team of experienced realtors who assist in obtaining a buyer for your home.
In order to qualify for a short sale the borrower must prove to the lender that there is an economic or financial hardship preventing them from being able to pay the deficiency amount of the secured lien. Then the borrower must provide all lenders that have a lien on the property with an offer to purchase the home from a bona fide purchaser. This person CANNOT be related to the borrower. If you are interested in selling your home or avoiding foreclosure, don’t hesitate and contact the Law Offices of Joshua B. Sanfield at 586-573-9000 today for a free consultation.