I have worked in short sales and foreclosures for over three years now. Two or three years ago I had to explain what short sales were! Now, almost everyone has heard of short sales as a method of selling real estate that has a larger mortgage on it than it is worth. I educate clients on their options and details of this type of transaction.
I am a Realtor and Investor. I work with people all over the US helping them to find a way out of tough situations with their real estate. Most people I talk to have issues with less income coming in and/or their mortgage payments going up. On top of that most of the time their real estate is worth a lot less than what they owe.
Here are some solutions: Most people start talking with their bank to get a mortgage modification. This can be good, but often the reduction in monthly payment is not enough to make a difference. The banks often deny the modification because of too little income.
The second thing people may want to look into is a legal defense from the pending foreclosure action. This has been successful in delaying the foreclosure for months or even years!
After going through these steps, often it will still come to a foreclosure or short sale as a long term solution. The preferred method is usually the short sale. Credit is damaged much less and often nothing more is owed to the lender!
There are a lot of people who are in what I can the “standard” position. This is someone who has lost their job and/or have lower income and their home has lost a LOT of value and the mortgage payment has gone up. Often, people want to try to get a mortgage modification in order to continue paying lower payments and stay in their home. I totally agree with this as a first tactic to use. BUT, the end result is usually too little a decrease in payments and they end up right where they started.
If these don’t solve the problem, you can move to a short sale. This will allow negotiation with the bank and a sale close to today’s market price. The owner can find a cheaper way of living and a fresh start. The deficiency amount and tax can usually be dismissed! The short sale is much better than a bankruptcy or foreclosure! They can leave the owner with money that still has to be paid over many years and tax liabilities! There are many lawyers that can help.
Want to find out more about short sales, then visit Daniel Wolkoff’s site on how to choose the best way to avoid foreclosure for your needs.
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