SHORT SALE NEGOTIATIONS
A person's home is often the most expensive asset they acquire during their lifetime. When a homeowner faces financial hardship and can no longer make their mortgage payments, there are alternatives to foreclosure. Among the most prevalent is a “short sale,” or the delivery of a deed in lieu of foreclosure. In a short sale, the home is sold to third party and the mortgage lender accepts a sale price that is less than the amount they owed on the existing mortgage. Most homeowners who go through the short sale process that the lender can obtain a deficiency money judgment for the difference between what the bank is owed and the short sale price. This often happens when the homeowner is not represented by competent counsel. Forgiveness of the deficiency is not automatic. This forgiveness must be included in the negotiations.
A deed in lieu of foreclosure is when the homeowner delivers ownership of the home to the lender. Lenders in large Metropolitan areas are usually reluctant to accept a deed in lieu of foreclosure because lenders are not in the business of home ownership. However, this technique can be used when the lender does not want to undergo the expense of a foreclosure. It usually depends on the area where the home is located, the amount owed and the prospective purchases readily available in that market. Often times, homeowners are not aware that this resolution is available and undergo unnecessary stress and expense.
The Law Firm of Lewis C. Edelstein, Esq., P.C. is experienced in short sale negotiations and acting as a liaison between the seller and the lender.