Avoiding Foreclosure
Short Sales and Pre-Foreclosure Information
With many borrowers purchasing or refinancing properties with variable rate loans that have now adjusted causing their payments to skyrocket - and the fact that home values in San Diego have taken a dip from the height of the market - many people are left in the stressful and frustrating position of owning a home they can no longer afford, or need to sell a home they owe more on than it is worth.
In many cases homeowners have foreclosure proceedings looming and feel that there are no options - but there are! A short sale can be solution to sell the property, alleviate stress and salvage a person's credit.
The term "short sale" refers to a transaction where there are insufficient funds generated from the sale of a property to pay off the seller's loan and cover all of the closing costs. Short sales are an option for the existing lender rather than allowing the property to go into foreclosure as a property in foreclosure can be very expensive: during the foreclosure process there can be months where the mortgage goes unpaid, taxes accrue, and possible repair issues arrise. Increasingly, lenders have found that a short sale can be much less expensive than foreclosure.
- A short sale allows you to sell your home and avoid foreclosure
- Devin Properties will negotiate with the bank
- We can accomplish this with no money out of your pocket
- We can salvage your credit and you can walk away!
There are things to consider when thinking if a short sale is the right option for you. In most cases the lender will require the borrower to prove their hardship by supplying two months banks statements, a letter explaining why you can no longer afford your mortgage, pay stubs, and possibly two years tax returns. Additionally, different lenders have different policies on short sales and short sale reporting on your credit.
Some lenders will require a seller to sign an "unsecured note" for the balance of the shortage. Others will agree to write off the balance but could 1099 the borrower for shortage in which case the shortage would be treated as ordinary income. Depending on which way the lender handles the short sale there can be some credit consequences. However, given that foreclosure has the most devestating affect on credit, many find a short sale the most viable option for quicker recovery.
Additionally most people are under an incorrect assumption that with once a property is foreclosed upon the borrower is "off the hook." However, within the state of California, if a property is foreclosed on the lender can pursue the borrower after the foreclosure proceedings for full payment of the money they lost and fees. This applies if the loan was not original purchase money on a primary residence.
As with any major financial deicision we suggest that our clients consult with their accountant and attorney to ensure that pursuing a short sale is the best option for them.
Devin Properties has been assisiting clients successfully with short sales and has a long list of very satisfied clients who were thrilled that they were no longer in a stressful position of owning a property that they no longer wanted or could afford.
WANT TO WALK AWAY FROM YOUR MORTGAGE?
Consider a short sale!
CALL TODAY
