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Should You Short Sale Your Home
By
Steve Arnold
Are you a
homeowner facing a financial situation that
has spun completely out of your control? If
so, one answer to an irreparable financial
problem is to short sale your home as a
means to find relief from an important debt
obligation. Essentially, a short sale
denotes that you have located a purchaser
who is agreeable to buying your home for a
value less than your mortgage’s remaining
balance. Your mortgage lender loses money on
the deal as do you; however, a short sale is
a decision that your mortgage lender may
agree to provided that you have first done
your research thoroughly.
Why would a mortgage lender agree to take a
loss on the sale of your residence? Clearly,
if you can persuade the mortgage lender that
you are desperately behind on payments and
that you have no prospect of being able to
make future payments, then you are a chief
contender for a short sale. As the
foreclosure process is a costly one, your
mortgage lender will in the end have to
subsidize your vacated home.
With a short sale, your mortgage lender may
be glad to avoid costly lawyer fees plus not
have the uncertainty of a possible later
bankruptcy on your part and the delays that
can happen with that sort of determination
in their laps. In addition, eviction
expenses and the responsibility of having to
administer and eventually dispose of your
home are other burdens they may not want to
have. Ultimately, a foreclosure could cost
your mortgage lender more than ten thousand
dollars, money he certainly will not recoup
if you later declare bankruptcy.
Your mortgage lender may consider your short
sale plan if the price the new owner
proposes to pay for the house is close to
its actual market value. However, if the
price offered is considerably less than the
home’s worth, then you must convince the
mortgage lender that it is still in their
best interest to go ahead with what is a
certain sale versus their being saddled with
the task of having to administer a hard to
dispose of and costly piece of property.
Remember: mortgage lenders are in the
business of financing property, not managing
it.
To win your crusade, you may have to provide
compelling evidence that the home requires
wide-ranging repairs, that the local
employment and/or housing market is
distressed, or you may have to come up with
some other persuasive explanation as to why
the mortgage lender should agree to your
short sale.
On a personal level, a short sale is
preferred over a foreclosure since with the
latter decision your credit is left in
shambles. With a short sale, you can mend
your damaged credit standing faster and get
back into the housing market quicker once
your financial picture has cleared.
Yes, a short sale is a radical response that
should only be exercised during a time of
complete desperation. Your mortgage lender
is not required to accept your proposal, but
a compelling line of reasoning on your part
may just tip the scales in your favor.
Conclusion
Are you one
of the many that suffer from insurmountable
debt and wonder if bankruptcy is an option?
Give us a call at (203) 924-6700 or
contact us.
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At these seminars an attorney will personally go over your
mortgage looking for a defense