What You Should Know About Short Sale
When a Trustor can no longer pay a loan in full, what often follows is foreclosure or even bankruptcy. This is a very depressing financial situation, but it can be solved with a little known alternative: the 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.
That's right, the lender agrees to accept payment that's considerably less than the total amount that's due. Not every bank or lender will accept a short sale -of course it would make much more financial sense to pursue foreclosure and just take the collateral.
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.
It's hard to guess how long securing a short sale will take, but it's sure to be long, tedious, and tiring. Lenders usually say about 21 days or so for a case to be completely approved.
Short Sale Strategy Overview
The process: The contract, authorization to release, and the addendum -these are the key parts of the whole short sale process, topped off with the warranty deed. Here we'll take a closer look at the contract and the addendum:
The Contract: This can be laid out in a single page, or even 20 pages -any type of generic sales or purchase contract. Should the price be mentioned, it should be followed by the phrase "see addendum".
The Addendum- Your Most Important Tool
The basic document that contains nearly all vital info on conducting the transaction is contained in the addendum:
Info on the origin of the contract for short sale
The Date
The names and other info pertinent to the parties involved
Address
It's better if both the simple address and the legal address are listed to avoid confusion.
Any investor, that is, the lenders, should know that in the foreclosure process, there is the opportunity to acquire bargain property -certainly a valid reason to agree to short sale. - 23162
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.
That's right, the lender agrees to accept payment that's considerably less than the total amount that's due. Not every bank or lender will accept a short sale -of course it would make much more financial sense to pursue foreclosure and just take the collateral.
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.
It's hard to guess how long securing a short sale will take, but it's sure to be long, tedious, and tiring. Lenders usually say about 21 days or so for a case to be completely approved.
Short Sale Strategy Overview
The process: The contract, authorization to release, and the addendum -these are the key parts of the whole short sale process, topped off with the warranty deed. Here we'll take a closer look at the contract and the addendum:
The Contract: This can be laid out in a single page, or even 20 pages -any type of generic sales or purchase contract. Should the price be mentioned, it should be followed by the phrase "see addendum".
The Addendum- Your Most Important Tool
The basic document that contains nearly all vital info on conducting the transaction is contained in the addendum:
Info on the origin of the contract for short sale
The Date
The names and other info pertinent to the parties involved
Address
It's better if both the simple address and the legal address are listed to avoid confusion.
Any investor, that is, the lenders, should know that in the foreclosure process, there is the opportunity to acquire bargain property -certainly a valid reason to agree to short sale. - 23162
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 @ 1:10 AM
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