The Short Sale
When an owner can longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure. One of those options is called a short sale.
Short sale is usually the last step taken by the bank to recover losses from a defaulted mortgagor. When lenders agree to a short sale, it means the lender agrees to accept less than the total amount due. They are willing to forgive a certain amount of debt or deficiency. However, not all lenders will accept a short sale or discounted payoffs, especially if it would make more financial sense to foreclose.
State laws vary, so consult your real estate lawyer to determine if your loan and case qualifies for a deficiency judgment or claim for a short sale.
Also, see your accountant -the IRS may count debt forgiveness as considerable income, be wary of the tax ramifications involved. Another good reason to consult your lawyer is that the lender may still legally pursue you for the unpaid debt.
The tedious process of securing a short sale is sure to take a very, very long time. 21 days is the usual answer, should you ask the lender. But that's just a minimum, some cases may actually take twice that time to get approved.
Due to negative equity secured, even those who've never made a single payment or installment can avail of a short sale. A short sale is the eject button of a financial situation that's headed straight down to bankruptcy, take it when you can, while you can.
The full process of a short sale will include a contract, an Authorization to Release Information and the addendum. A warranty deed is a tool used in the process. Let's examine the process now, starting with the contract.
The Contract: The contract can be of any variety-a one page, a nine page, a board of realtors' version, or any generic type of purchase and sales contract. However, at any point in the contract in which price is mentioned, you should fill in the phrase: "See Addendum."
The Addendum
This is the most important piece of paper in your entire manual! Let's review the Addendum in detail. The first section on the top is just generic information pertinent to the specific property:
Origination of the contract
Date
The names and other info pertinent to the parties involved
Address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any good investor should be aware that a short sale is a good way to peruse quality bargain real property -a case in which a short sale is actually more financially reasonable than outright foreclosure. - 23204
Short sale is usually the last step taken by the bank to recover losses from a defaulted mortgagor. When lenders agree to a short sale, it means the lender agrees to accept less than the total amount due. They are willing to forgive a certain amount of debt or deficiency. However, not all lenders will accept a short sale or discounted payoffs, especially if it would make more financial sense to foreclose.
State laws vary, so consult your real estate lawyer to determine if your loan and case qualifies for a deficiency judgment or claim for a short sale.
Also, see your accountant -the IRS may count debt forgiveness as considerable income, be wary of the tax ramifications involved. Another good reason to consult your lawyer is that the lender may still legally pursue you for the unpaid debt.
The tedious process of securing a short sale is sure to take a very, very long time. 21 days is the usual answer, should you ask the lender. But that's just a minimum, some cases may actually take twice that time to get approved.
Due to negative equity secured, even those who've never made a single payment or installment can avail of a short sale. A short sale is the eject button of a financial situation that's headed straight down to bankruptcy, take it when you can, while you can.
The full process of a short sale will include a contract, an Authorization to Release Information and the addendum. A warranty deed is a tool used in the process. Let's examine the process now, starting with the contract.
The Contract: The contract can be of any variety-a one page, a nine page, a board of realtors' version, or any generic type of purchase and sales contract. However, at any point in the contract in which price is mentioned, you should fill in the phrase: "See Addendum."
The Addendum
This is the most important piece of paper in your entire manual! Let's review the Addendum in detail. The first section on the top is just generic information pertinent to the specific property:
Origination of the contract
Date
The names and other info pertinent to the parties involved
Address
Tip: It's advised to list both the legal address and the simple address in the addendum -for the purposes of clarity and transparency.
Any good investor should be aware that a short sale is a good way to peruse quality bargain real property -a case in which a short sale is actually more financially reasonable than outright foreclosure. - 23204
About the Author:
Know about short sale an alternatives to bankruptcy or foreclosure only at Don Burnham's website http://www.weknowthewayback.com. Visit today to know all about short sale!
posted by X - Men @ 1:09 AM
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