Is There a Benefit to Doing a Short Sale?

 Many people falling behind on their mortgages and facing foreclosure wonder whether there is a benefit to doing a short sale versus simply riding out the foreclosure and leaving the home upon eviction. Both options have their pros and cons, and so it is advisable to speak with a short sale attorney before making the final decision. Short sales can do a lot for a homeowner. Here are the main benefits:

• Personal Deficiency Judgment a/k/a in personam deficiency. When your home is underwater and in foreclosure, at a certain point the bank will obtain their judgment and sell the property at public auction. Oftentimes the property will sell for less than the amount you owe on the property (because it is underwater). The difference between what the home sells for versus the amount you owe turns into a personal judgment levied against you. What that means is that the bank can pursue you for more money even after they have completed the foreclosure and taken your home. In the past banks were not pursuing these deficiency judgments, but now they are vigorously. The main benefit of doing a short sale is that the bank will waive the personal deficiency judgment. That is the deal. Of course, you will want an experienced short sale attorney to review the agreement to verify this is the case.
• Credit Reporting. Short sales appear differently on credit reports than a foreclosure. While both have significant negatives effects on your credit rating, it is generally better to have a short sale than a foreclosure.
• Phantom Foreclosure. There are reported cases of banks purporting to foreclose on a property so that the homeowners leave, but then the bank never completes the process and the property stays in the homeowners’ names indefinitely. This means that all bills, fines, utilities, etc. remain your responsibility rather than the bank’s.  Homeowner’s Associations are well known for pursuing non-payment from homeowners who have left the property, sometimes even years after the homeowners left. A short sale ensures that the property is transferred out of your name so you do not have to worry about any lingering liability.

Do I Need an Attorney for a Short Sale?

The answer to this is unequivocally yes. Attorneys will make sure the foreclosure does not proceed to a point past where it is no longer possible to do a short sale (usually the foreclosure auction). Attorneys will also interface with the bank and may be the party responsible for submitting the short sale application and negotiating the terms of the short sale agreement. The attorney will also negotiate the real estate transaction on your behalf with the buyers to ensure that they are aware of and fully understand the implications of buying a short sale home.

Contact a Lake County Short Sale Attorney at Johnston Tomei Lenczycki & Goldberg LLC Today

If you have fallen behind on your mortgage payments and are facing foreclosure, speak with an attorney at Johnston Tomei Lenczycki & Goldberg LLC today to discuss your options, including the possibility of short sale. Short sale is a great tool for many people to get out from under a home that is underwater. Short sales are effective, and many banks will approve their terms. The short sale attorneys at Johnston Tomei Lenczycki & Goldberg LLC will provide you with all of your options regarding foreclosure so that you are enabled to make the best decision for your situation. If you are in default, speak to us today regarding your home so you can make that first step in the right direction.