What is a Short Sale?

A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens’ full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency. Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.

A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. While credit is also typically damaged much less than from a foreclosure, both often result in a negative credit report against the property owner.

How do I stop foreclosure?

Foreclosure defense can delay the case from moving forward and an Emergency Motion to Cancel a foreclosure sale date is very effective if the case has progressed. Bankruptcy can help if all else fails.

How do I qualify for relocation money from the bank?

Each lender offers different incentive programs. Most major lender participate in HAFA (home affordable foreclosure alterative program) HAFA guarantees a waiver of deficiency in addition to $3000.00 in relocation money.

What happens to the mortgage deficiency?

Some lender/bank may forgive the difference between what you owe and the short sale price. This is called a waiver of deficiency

Could I have IRS tax consequences based on the forgiveness of my mortgage debt?

You may be eligible for the “Mortgage Forgiveness Debt Relief Act of 2007” exemption or you may have a tax consequence on the mortgage amount forgiven by the bank. We highly recommend you seek advice from an attorney or tax professional.

Who pays the delinquent HOA fees?

The bank will generally pay 6-12 months of delinquent HOA dues as part of the short sale proceeds.

Who pays the delinquent property taxes?

The bank will generally pay the delinquent property taxes out of the short sale proceeds in most cases.