Avoid Foreclosure by Negotiating a Short Sale

The Law Office of Goldstein and Clegg can assist homeowners in selling your Massachusetts home or commercial real estate for less than you owe on it without facing foreclosure, though a tool called a short sale.

A short sale, also called a distress sale, is when the homeowner’s property has been devalued below the mortgage leaving a shortage between the current market value of the property and the present mortgage on the property held by the lender. Homeowners owe the difference between the mortgage balance and the discounted amount as a result of the short sale, which is referred to as the debt shortage. short sale would generally benefit the lender because the lender avoids the expenses and hassle of seizing a delinquent customer’s property. In addition, lenders realize that they could lose money if the borrower’s home is auctioned in a foreclosure proceeding.

Banks and other secured creditors who hold liens against real property in Massachusetts realize that a foreclosure can take time, expense, and lead to a decline in the eventual sales price at a foreclosure auction. As such, a lender may permit the sale of your home or business real estate, for less then the amount owed on the mortgatge.

To decide whether or not to do a short sale, lenders look at various factors. Those factors are:

1. Whether the seller is deserving of a break.
2. Whether it would be cheaper to simply repossess and sell.
3. How many other properties the lender has in default.
4. Whether there are cosigners on the mortgage who can be held responsible for the balance covered on the mortgage.

Even when borrowers engage in a legitimate short sale, there is no guarantee of success. It’s difficult to have an agreement where the interests of all parties are satisfied. One has to take into account the interests of the lender, homeowner, agent, buyer and investor who held the mortgage. Also, if the husband and wife were divorcing, then both would have to agree to have a short sale.With regard to managing a short sale, it’s important that sellers review loan documents with an attorney to make an informed decision.