In both short sales and foreclosure, the decision is made by your mortgage lender. The most important aspects to getting a lender to agree to a short sale, and saving you the more damaging credit implications of a foreclosure is to prove that you have no other way to pay the mortgage and that the amount received from a short sale is the fair market value
How does a short sale versus a foreclosure affect a deficiency judgment?
If your short sale is handled successfully, the lender may give up the right to pursue a deficiency judgment against you. We offer you Expert Advice about Real Estate Solutions to your situation , referrals to other Experts like attorneys and CPA’s to help you come up with a plan to identify, choose and execute the course of action that offers you the best possible outcome.
Following are a few examples of your action choices:
1. Contact Your Lender: If you have reviewed all possibilities of creating cash-flow to pay your mortgage, then it's time to reach out to your lender. Do this as soon as possible! Your ultimate goal in contacting your lender is to create an agreement that will alter your mortgage so that foreclosure proceedings can be stopped before they are finalized.
Possible options to discuss with your lender include:
1. Loan Modification: this can take many forms including:
· Forbearance
· Re-amortization
· Principle reduction
· Short Refinance
2. Deed in Lieu of Foreclosure: Your lender may accept the return of the title to your home, but beware that the lender may still sue for loss and report any uncollected funds due to loss to the IRS as taxable income to you. This option may have negative effects on your credit report
3. Short Sale: Considered by many one of the best options available if the home owner wishes to avoid foreclosure and/or bankruptcy. In this option, the lender accepts less than what you owe on the property, relieving the homeowner of debt. Lenders are often willing to accept a short sale because it greatly reduces the expense and time involved in foreclosure proceedings. In some cases, a short sale does less damage to your credit than a foreclosure. A qualified team including your REALTOR, Attorney and Financial Advisor will be exceptionally helpful in completing the short sale process.
4. Strategic Default: Your attorney will advise you whether this option is available and suitable to your circumstances
