What is a Short Sale

Rachael Bronstein By May 17, 2013 Posted in News Share

As an alternative to a costly and lengthy foreclosure, mortgage lenders may agree to allow homeowners who are on verge of defaulting on their home loan to sell their property for an amount that is much less than what they still owe on their mortgage. Known as a “short sale”, this action has become an increasingly common occurrence between homeowners and mortgage companies because it provides benefits for all involved.

Lending institutions consenting to a short sale avoid excessive expenditures associated with foreclosures. Court fees, along with paying to maintain a property that may sit uninhabited for months or even years, could cost lenders that do not agree to a short sale many thousands of dollars. In addition, foreclosed homes that remain unsold deteriorate rapidly, resulting in lenders losing even more money on their original investment when the home is finally sold for much less than its pre-foreclosed value.

Eligibility Requirements for Short Sales

Lenders may expect homeowners facing foreclosure to meet the following criteria in order to pursue a short sale:

• Proof that future payments on the mortgage are not possible due illness, unemployment, bankruptcy or other adverse circumstances.
• The mortgage is in default status or nearing default status.
• The homeowner has no substantial assets or funds available with which to make payments on the mortgage.
• The home’s market value is less that what the homeowner owes on the mortgage balance

How Mansfield Bronstein, PA Can Help With Your Short Sale

In addition to inflicting severe emotional stress on your and your family, losing your home to foreclosure means you must find another place to live within a short period or pay to put your things in storage while searching for an appropriate place. Foreclosure also damages your credit rating, which can make it even more problematic when attempting to rent an apartment or house. Moreover, people with a foreclosure staining their credit reports have occasionally encountered difficulty with obtaining employment in certain industries.

Another possible consequence of foreclosure is receiving an unexpected tax bill from your lender that represents the amount of money they were not able to recover from selling your property.

As attorneys with experience and knowledge of the short sale process, we can help negotiate a short sale with your lender if you are facing foreclosure and do not qualify for mortgage modification. Along with consultations, comprising settlement statements, listing expenses involved in the short sale and submitting your letter of hardship that delineates financial difficulties you have specifically encountered, Mansfield Bronstein, PA will personally assist you throughout the short sale to ensure you receive an outcome beneficial to the future financial and emotional security of you and your family.