Many home owners who have purchased homes in the last five to ten years owe more on the home than it is worth. For those who are struggling to make payments or can not make payments a short sale may be the solution. What is a short sale? A short sale is a sales transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan.
The bank has to agree and even when they do agree it doesn’t always work out. They seem to be able to start foreclosure proceedings much faster than they can approve an offer.
Some people who owe more on their home that it is worth and can
shorts
make payments beleive that a short sale can be a way out. It doesn’t work that way. Banks will not even entertain a short sale unless the home owner is behind on mortgage payments and it isn’t enough to be behind on them there has to be a hardship like a job loss or pay cut or medical bills or some other reason.
A short sale does have a negative impact on the borrowers credit score. It isn’t possible to get the bank to go approve a short sale and then just go out and buy another house.
The easiest way to sell the home and pay the difference between the sale price and what is owed on it. For those who have the money that is usually the only way out.
People seem to think that if they just feel like moving and are up side down on their mortgage they can just get the bank to agree to a short sale and then they can go buy another home and live happily ever after.
Great post! The short sale process isn’t for everyone, but it may be a way to prevent deed-in-lieu or full blown foreclosure.
That is the point of the short sale but the deed-on-lieu may be better for some. The credit rating is going to take the same hit either way.
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