Over the holidays Federal Mortgage companies Fannie Mae and Freddie Mac agreed to hold off on foreclosure evictions of families until after the New Year. The response to this moratorium on foreclosure evictions has been mixed as protestor’s have gathered to denounce the mortgage giants Freddie Mac and Fannie Mae’s fruitless efforts to delay the inevitable.
Homeowners are often unsure of what options are available when they reach financial hardship and are faced with foreclosure. A short sale can be a helpful tool when trying to alleviate the burden of a looming foreclosure.
A short sale is an agreement by a mortgage lender to sell property for an amount lower than the balance owed in order to relieve the buyer of the mortgage obligation. Depending on the negotiated amount of the sale and the timeliness of past mortgage payments, a short sale may help avoid the huge hit to your credit score that foreclosure causes. Additionally, short sale participants can later purchase a home in a shorter time than those who foreclose on their property.
A short sale can be completed by finding a buyer to purchase the home who is willing to pay current market value, and having the mortgage provider agree to the sale. Any shortage after the sale will then either be written off by the lender and an IRS 1099 is issued to the seller, or a deficiency remains which the lender may pursue to collect against the seller.
The short sale process can be complicated, and the lender may not be willing to negotiate. It is important to know that a real estate attorney can help negotiate the sale and terms with the mortgage lender and provide you peace of mind that your sale is being handled by an accountable professional.
If you have legal questions regarding your short sale or you are considering your options, call Blick Law Firm today at (813) 931-0840 to schedule a free 15-minute consultation with attorney Michael Blickensderfer.