The are many advantages of a Short Sale over a Foreclosure
1) In a short sales, lenders agree not to pursue deficiency judgements, which is where the lender will go after you for difference between the amount recovered in the sale of your house vs what was owed. In a foreclosure, the home is sold at auction at a steep discount and remaining balance can be sold of to debt collectors that can pursue you for the deficiency for years after the foreclosure
2) Your credit score is much more severely impacted by a foreclosure than a short sale. A foreclosure can reduce your credit score by as much as 200 - 300 points and a foreclosure remains on your report for 7 years or more. In a short sale, the debt is reported as 'Satisfied for Less than Owed' which will impact your credit score by 50 - 100 points. Recovery time from a short sales is about 2year vs 7+year for a foreclosure
3) You're still in control. In a foreclosure, the bank will take possession of your home and if necessary, the banks will send out the county Sheriff to forcibly remove you from your home if you refuse to vacate before hand. In a short sale, your home is sold is via a typical real estate transaction through a Realtor. You are leaving on your terms versus theirs.
4) The government sponsored HAFA program is gone, but there are still some incentives out there such as relocation assistance to encourage homeowner cooperation in the short sales process. In a foreclosure, there are no incentives
Short Sale
A short sale is when you sell your home for less than the total debt balance remaining on your mortgage and the proceeds of the sale pay off a portion of the mortgage balance.
Deed-in-Lieu
A deed in lieu of foreclosure occurs when a lender agrees to accept a deed to the property instead of foreclosing in order to obtain title.
With a HAFA deed in lieu of foreclosure, the homeowner voluntarily transfers ownership of the property to the lender in full satisfaction of the debt. The property must be free and clear of other mortgages, liens, or other encumbrances. The loan servicer may require that the homeowner list and market the property for sale before a deed in lieu transaction will be approved.
The deficiency is too great, they'll never forgive this much
Yes, they will and they have. There are no guarantees as the circumstances surrounding each file can be different, but with the right team behind you lender will accept the market value of the home despite what's owed.
I make too much money, they'll never forgive me
We've worked with many high net worth clients and have successfully closed on a short sale transaction with them despite their high net worth.
I have too many mortgages
The majority of short sales have more than one lien on the property. We work with all home-owners regardless of the circumstances surrounding their home.
My situation is too complicated
Complicated is our middle name. We help home owners in all walks of life in all kinds of difficult situations.
It'll cost too much
Our services are provided to the home owner at no cost to them.
Homeowners all over the country have been falling onto hard times and finding themselves in a financial hardship. It can be due to unemployment, underemployment, divorce, a failed business, unforeseen medical expenses or any number of events that can cause your income to drop or expenses to grow. Before the homeowner knows it, they are behind on their mortgage and facing foreclosure and cannot sell their property for what is owed.
With no equity in the property, homeowners can feel trapped with little or no options. However, there are options available that can get them out of their upside down mortgage on their property and on their way back to financial stability.
For many, the best option is to sell the property thru a process with the lender called a short sale. This is where the lender agrees to accept an offer on the house that is less than what is owed by the homeowner. Most lenders want to work with homeowners to sell the property in order to cut their losses. However, having to sell a home this way can be very stressful, but it doesn't have to be. That's where MitigationPros, with our team of experienced staff and legal advisors, can educate the homeowners and can facilitate these types of transactions.
We work as the intermediary between the homeowner, the realtors, the lenders, and any other lien holders by negotiating prices, deficiency balances and any other terms required to make this a successful short sale. We'll work with any lender regardless of how much of a loss they are facing and with any homeowner no matter how far behind they are on their mortgage payment.
We guide the homeowners through the very tedious document collection process and make sure they are in compliance with their lender requirements. By working directly with our knowledgeable attorneys we take the guessing game out of the short sale process. Our attorney will advise all homeowners on any legal matters pertaining to the short sale.
Have questions? Read our FAQ for answers to some of the most commonly asked questions. Still have questions? Feel free to give us a call.
