Once notorious for their difficulties, short sales are becoming a more common solution. Recent legislation has made it more difficult to process foreclosures, yet many banks still find that they have a backlog of homes. Unable to clear the backlog through traditional foreclosure, many may be more open to short sales. These factors can empower you.
The Law Office of Clint W. Chase offers an array of foreclosure defense tools, including short sales. If appropriate, a short sale attorney can negotiate with your lender and a real estate broker to help you set your debt aside.
If you’re at risk of default, a short sale, where the lender agrees to sell a property for less than the mortgage balance, may be worth considering. Legislation now protects sellers from lien holders, making this option more viable than ever.
Often referred to as pre-foreclosures, short sales have begun to outnumber foreclosure sales nationally. Loan servicers have more incentive to accommodate these sales and banks have sped up their processing time.
Short sales will always be more complicated than traditional home sales. Short sale attorney Clint Chase can help guide you through the process in Richardson. We’ll outline your tax obligations and the impacts on your credit. We’ll help you understand the lenders’ responsibilities. And we’ll defend your rights before and after the sale.
WHAT IS A SHORT SALE?
A short sale occurs when the property is sold for less than the loan amount with the cooperation of the lender. It permits more owner control over the process and according to Fannie Mae, less credit consequences than a foreclosure. Not all lenders will approve a short sale and not all owners or all properties qualify for short sales.
WHAT ARE THE QUALIFICATIONS FOR A SHORT SALE?
Both your property and you have to qualify for short sale consideration.
HOW DOES THE PROPERTY HAVE TO QUALIFY FOR A SHORT SALE?
Comparable sales must substantiate that your home is worth less than the unpaid balance of your loan. These comparable are identified in a document called a BPO, a Broker Price Opinion letter.
HOW DO I QUALIFY FOR A SHORT SALE?
You must prove a hardship that makes it impossible to continue making loan payments. A hardship is the result of a circumstance beyond your control that forced you into a position where you can no longer afford loan payments. The criterion for hardship is more stringent for loan modification than at short sale. Some examples of hardship include:
HOW WILL A SHORT SALE IMPACT MY CREDIT?
A short sale coupled with 90 day late pays will damage your credit almost as much as a foreclosure. However, Fannie Mae has stated that you will be able to obtain a home loan in two years after short sale whereas you will have to wait about seven or more years following a foreclosure.
IF MY CALIFORNIA LOAN IS NON-RECOURSE, WILL I RECEIVE A 1099-C FOLLOWING SHORT SALE?
Yes, however, if the short sold home qualifies as your principal residence; you may claim an exemption from payment of debt relief income under the Debt Forgiveness Act of 2007 if it is still in effect at the time of the sale. There are other exemptions you may qualify for, such as the insolvency exemption. You may still have to report debt relief on your state return, however, unless your state has parallel exemptions available.
HOW LONG DOES A SHORT SALE GENERALLY TAKE?
It should not take longer than two to three months to obtain an offer. The approval process should not take longer than six weeks to two months at most from the time we have an accepted offer.
Our law office provides legal services to victims of foreclosure as well as loan modification relief to clients throughout Richardson. We can help!