What is a Short Sale?
A short sale is a situation in which the seller (1) owes more money on the loan (and any other liens on the property) than the sale of the property will likely produce on the market and (2) is unable or unwilling to bring money to closing. In a short sale the lender has not yet foreclosed on the property, which provides a window of opportunity for the owner to sell the property in order to at least partially satisfy the amount owed to the lender. A short sale is not a "get out of my mortgage for free" pass. It is one of several options a distressed seller should consider and must be approved by your lender.
Why should I consider a short sale?
Short sales are considered preferable to foreclosures because short sales may lessen the impact a foreclosure can have on the surrounding community and may not damage the distressed owner's credit as much as a foreclosure. Creditors may consider a short sale more forgiveable than a foreclosure which may allow for homeownership again sooner.
The government's provides information to sellers considering a short sale. I cannot determine whether a short sale is your best option but I am able to provide you with resources and information that can assist you in making that decision. I also recommend that you consult with an attorney and tax advisor that specializes in short sales.
When should I consider a short sale?
First and foremost you must determine if keeping your house long term is possible and feasible. If you can not or have not been able to pay your mortgage due to a qualified hardship and you are not able to refinance, modify your loan or work out a payment plan with your lender, a short sale is an alternative to foreclosure. If you have recieved a" Notice of Default" from your lender, a short sale should be a part of designed strategy that preserves your financial resources and protects your credit to the extent possible.
Where can I get help in determing an alternative to forecloure?
You can get free counseling with a HUD approved housing counselor who can provide you with information about available alternatives to foreclosure. Feel free to contact me for a direct referral to a local HUD approved counseling agency.