Short Sale Information

 A short sale occurs when a property is sold for less than what’s owed in the seller’s loan or loans, meaning the lender or lenders will release the lien or liens and agrees to take a discounted amount that is secured to the property. Example: If the unpaid balance of a loan(s) is $600,000 and the property sells for $400,000, under a Short Sale the lender might accept the $400,000 as payment in full.

Most people in this situation think that foreclosure and bankruptcy are their only options. These options destroy credit and strip the owner of their dignity. But not all lenders will accept a Short Sale. It’s very important to work with a company that negotiates short sales on a daily basis. It’s up to the Realtor and the professional negotiator to convince the lender that the short sale is better than a foreclosure, meaning lenders look at the bottom line.  The foreclosure process is more  expensive for the lender and they are now realizing that short sales may be a better choice. Foreclosure is the last resort for the lender. One very important fact: seller must know going in that there are no guarantees what the bank will do. There are thousands of different lenders out there that you’re dealing with short sales and they ALL work differently. It’s very important to work with a Realtor that is working short sales every day because they are more familiar with what the banks are looking for.

The biggest part of the negotiation is on the DEFICIENCY JUDGEMENT. A DEFICIENCY JUDGEMENT is a judgment lien against a debtor/borrower  whose foreclosure  sale did not produce sufficient funds to pay the mortgage  in full. If a property sells for less than what’s owed on it the lender may release the property so it can be sold but the bank can come after the seller for what is not paid off.  This is the most important reason for working with someone who has experience with short sales. On your behalf, complete release is negotiated without a deficiency judgment to the seller.

If you are in or close to foreclosure DO NOT HESITATE, CALL US IMMEDIATELY. We have stopped foreclosures for homeowners. Foreclosure is a devastating thing to have on your credit. The bank feels that the owner didn’t care so after the foreclosure they will likely hit the owner with the deficiency judgment that will not go away until it is paid in full and that number could be in the hundreds of thousands of dollars. At foreclosure the property goes to the highest bidder. Your home may be worth $ 500,000 on the open market but at the foreclosure sale the highest bid might be $ 300,000. The bank could than place a $ 200,000 deficiency judgment on you and your credit report until you pay that in full. The bank could possibly garnish your wages (a court order that allows the bank to make your employer take money from your paycheck until the debt is paid in full) then people feel that their only choice is to file bankruptcy. This will only further you credit problems. CALL TEAM CRUZ @ Keller Williams Realty FIRST and avoid all these potential problems.

Click Here to to check document on Foreclosure and Short Sale credit impact 

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