KBP LAW

Stop A Foreclosure

Let's speak about short sales for a moment!

Short sales are a situation in which the lender of a mortgage will accept LESS (yes Less) than the amount due in order to discharge and report that mortgage as paid.  When does this come into play? Well, this comes into play in a downturn in the economy.  Which never happens – or does it? I am fortunate enough to have been practicing law for multiple years where I've seen good cycles and bad cycles of the economy.

During the downturns the short sales become very common; and they are a mechanism in which the homeowner that is for some reason or another (whether it's a life or a health issue) having difficult time making mortgage payments. The homeowner, for many advantageous reasons such as credit score, the industry they work in, karma, foreclosure avoidance, equity, etc… wants to work something out with the holder of their mortgage that is amicable. A short sale is a way in which they can both do so and move on with the property. 

In order to effectuate a short sale a strict process exists. The lender has you apply for a short sale and show that you're eligible for the short sale. To basically show that you're eligible to pay less than the full amount due for the full outstanding mortgage amount. Prior to even accepting offers from potential purchasers once you go through that process and fill out that form with the bank and they deem you to be eligible for this program then you know how to price your property then you can list your property with a real estate agent or on your own I'd suggest a real estate agent because this is complex and once those figures come in and you accept the best offer then you present that to the bank.  Now the decision to sell and at what price is essentially a mutual decision with you and your lender.  When you accept that offer the bank also has to accept that offer via the lowered payoff amount. 

One of the biggest issues to look for and that we at the Law Offices of Kenneth B. Phillips can help you navigate with Short Sales is what happens with the deficiency amount when both you and the bank accepts an offer lower than the full amount.

Who is responsible for that payoff deficiency what occurs?

That is often the most crucial component and the reason why you need a competent real estate attorney to help you submit and navigate the short sale paperwork.