In 2015 there was nearly 1.1 million properties with foreclosure filings, a number that is a 3% decline compared to 2014 and a nine-year low. If there is no way to avoid keep your home and foreclosure, a short sale may offer you the only way to resolve the situation with a minimal amount of pain. A short sale is when the bank agrees to accept a payoff amount that is less than what is owed on the mortgage in order to expedite the sale of a home by a distressed seller. All short sale purchase offers that are made to the home owner must be approved by the bank. If the short sale is structured correctly, the bank then forgives the remaining balance of the loan.
What is in a short sale for me?
If there has been a foreclosure filing, we would be willing to bet you would love it if you could discover that you are not behind on payments and you could keep your home. A wish and a dream are not realistic, so it is in your best interest to actively participate in the process. The short sale is all about facing the problem, as opposed to ignoring the phone calls from your lender or walking away from your property. You will lose your home, but that would happen if there was a foreclosure. Your credit score will take a hit, but that will also happen if there is a foreclosure.
This all sounds terrible, but it is important to note that making an effort will help the lender look more favorably on you. With a home owner actively pursuing a short sale, the lender is more likely to include verbiage like “has agreed to accept a short payoff” or “will waive the right to pursue further collection” in the eventual short sale approval letter. A letter structured in this format can help minimize damage to your credit score. This means that the lender is not supposed to continue reporting the remainder due on the mortgage after the sale. Reporting a balance they have promised not to collect keeps your score lower for an extended period of time.
If things did not go as detailed above for a family member made the decision to actively participate in the foreclosure process by accepting to pursue a short sale, they have the right to look into legal action. Contact our office at 813-902-3925 to schedule an appointment for a free case consultation.