Short Sales: Throwing a Lifeline for Desperate Homeowners

Foreclosures

On any given day there are a slew of newspaper and magazine articles detailing the woes of financially strapped homeowners desperately grasping to their homes.

There are literally tens of thousands of Americans, at any given moment, struggling to hold onto their properties, and Florida is no exception.

Many homeowners look to loan remodifications to solve their mortgage problems, but they may not always be available or attainable. For many homeowners, they may automatically think that foreclosure is the next step – but it doesn’t have to be.

A Smart Alternative – the Short Sale

When loan remodificaiton isn’t an option, and foreclosure is the absolute last thing you want to do, you may decide to get out from under your Jacksonville home – and your mortgage –through a short sale.

A short sale is basically a transaction that involves selling your Jacksonville property for less than your loan balance – with your lender’s permission, of course.

A short sale, although it sounds pretty simple, may be quite complicated and may take months to complete. To give you a better idea, a typical short sale takes about four to six months to complete. It is also not uncommon for the short sale process to last much longer.

Short sales make sense for both the lender the homeowner because the lender avoids losing a considerable amount of money and the homeowner avoids the foreclosure process and the toll it takes on their life, their family and their credit.

Lenders lose about 40 percent on a foreclosure, while a short sale results in about a 19 percent loss to the lender.

Negotiating a Short Sale

Although a short sale may seem like the obvious answer, it is wise to negotiate “a payment in full received in full value” with the lender so that you won’t be responsible for paying back the difference between the sales price and your loan amount.

Although a short sale isn’t exactly a dream come true for many homeowners, it does eliminate a foreclosure filing on their credit, which may allow them to regroup, move forward and make a fresh start in a shorter amount of time.

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