A Short Sale occurs when your lenders agree to accept less for your property than what is owed on your mortgage. In finance terms, the lenders get "shorted" on the loan. Although these lenders are taking a loss, they are losing far less than if your property goes into foreclosure, so they are willing to accept the lesser amount as full payment. It also means less of a hit on your credit report. This is often better for everyone than the alternatives.

Here are some FAQs regarding short sales:

Who Is Eligible for a Short Sale? You are eligible for a short sale if your mortgage is “underwater” (you owe more to your lender than what your home is currently worth) and you can prove you are facing a long-term financial hardship. This could include a loss of employment, divorce, medical emergency, seriousness illness, death, etc.

When Should I Decide To Do A Short Sale? You should start the short sale process as soon as you decide it is not in your best financial interest to keep your home. This could be when you realize you can no longer afford the mortgage payments, when a loan modification is declined or not satisfactory, or when your financial situation changes for the worse. The sooner you begin the short sale process, the better chance you will have avoiding foreclosure.

How Much Does A Short Sale Cost? All costs associated with the short sale of your property (commissions, title, escrow, etc.) are paid by the lender and the buyer of your property. YOU DON’T PAY ANYTHING. However, you are still responsible for all mortgage debt until the property is sold.

Can I Receive Any Money From The Sale? No. Lenders specifically state that the homeowner cannot receive any proceeds from the sale. Remember, the lender is most likely taking a significant loss from the sale and doesn’t want you receiving any money at closing.

So How Do I Get The Process Started? Before talking to your lenders about a short sale, make sure you have our experienced short sale team in place to handle the entire process. This includes our loss mitigation team that will first try to modify your loan to much favorable terms before you decide on pursuing the short sale.

You may also want to talk with us about a deed-in-lieu or pre-forclosure sale. Call today.