A short sale is where a lending Institution or Bank will accept less than what is owed on the mortgage as a “short” payoff.

As the Real Estate Market continues to decline, more and more homeowners find themselves owing more than what their properties are worth.  Many are in  situations where they can no longer afford to pay the mortgage or are being forced to relocate due to work-related circumstances.

For these reasons, “Short Sales” are becoming more popular with Banks and consumers as an alternative to the costly and time-consuming Foreclosure process!

To avoid the long lasting and damaging effects that being foreclosed on will have on your credit.

In a “foreclosure” situation the foreclosing Bank suffers a much larger loss on their mortgage.  In some states, like Georgia, the Bank has the right to sue the homeowner for the deficiency balance, which in many cases forces the homeowner into Bankruptcy.

 

When a homeowner opts to do a short sale instead of walking away from their obligation, they are “in essence” helping the bank recover as much of the banks money as possible by selling the property for current market value.  In return, the Bank is less likely to come after the homeowner for the deficiency and in most cases the entire debt is forgiven.

A seller would be able to purchase a new home much sooner after a short sale versus a foreclosure.

Seller can generally remain in the property up until the closing date.

Banks and their share holders do not like excess inventory on their books, therefore if they see an opportunity where they can get rid of the property without the huge loss incurred after a foreclosure, most of the time they will take it.

Bank Losses on prime loans going through the foreclosure process are substantially higher than those for which the Bank accepts a short sale.

Lenders have pressure, on a federal level, to get the properties out of their portfolio since it affects their ability to sell loans on the secondary market.

A market saturated with foreclosures can cost lenders billions -- and as much as $50,000 per foreclosure -- according to a study by the congressional Joint Economic Committee.

So contrary to popular belief, your bank does not want to own your home.  

The above are just a few of the many reasons why a Lender would accept a Short Sale.

For More Information please feel free to contact our Short Sale Team

Short Sale Dept

Joel Williams Law Offices

3235 Satellite Blvd, Bldg 400, Ste 300

Duluth, GA  30096

Ofc 770-291-2110

Fax 770-291-2109

Email:  lawoffice@joelwilliamslaw.com