Short Sales And Their Benefits
While delinquencies on mortgages are on the rise nationally, many homeowners have been watching their property values decline to the point that they are now “underwater,” that is, their home’s value is less than their mortgage debt. An option that is becoming more attractive to both homeowners and lenders for these underwater properties is a “short sale.”
A “short sale” allows the underwater homeowner to sell their property for a price that is less than the amount needed to pay mortgage and other liens, encumbrances (e.g., property taxes, tax liens, etc.) and closing costs (including title insurance fees, realtor commissions, real estate transfer taxes and attorney’s fees).
The homeowner can benefit from a short sale over a foreclosure or bankruptcy because a short sale can have less of an adverse effect on the homeowner’s credit. At the same time, the lender can benefit too because it is generally less expensive for them to resolve a homeowner’s mortgage delinquency through a short sale rather than through foreclosure.
The benefit of a short sale can extend to the local community as well. Removing a property from the neighborhood’s foreclosure list can help raise the community’s property values, in addition to the fact that there will be a new owner paying property taxes and, if applicable, association dues.
Because there are many moving parts that must be coordinated for a short sale to be successful, having knowledgeable legal counsel with you during the process can be crucial. Through our national network of attorneys, The Mortgage Law Group can help you determine if a short sale is an option for you and then negotiate with your lenders to try to resolve your mortgage crisis. Even if a short sale is not an option for you, we can still help you determine other foreclosure defense methods that may be available.
Whatever your mortgage crisis may be, it is extremely important to promptly communicate with your lender if you feel you are no longer able to pay your mortgage. The sooner you address the issue, the more options you may have.