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Short Sale vs. Foreclosure

Benefits of Short Sales in In or Out of Bankruptcy

Riverview, Hillsborough County, Florida: Bankruptcy Attorneys

A short sale occurs when the lender agrees to allow the house to be sold for market value, even if the market value is less than what is owed on the house. Furthermore, the lender also agrees not to pursue a deficiency judgment for the difference between what the house sells for and what is owed to the lender.

Getting the House out of Your Name

Even if you intend to surrender your home or other real property in bankruptcy, which will discharge the entire debt, the property will remain in your name until either a short sale or a foreclosure occurs. Pursuing a short sale over a foreclosure is advantageous, as it is usually quicker than waiting for a foreclosure to occur.

Presently there are an overwhelming amount of houses on their way to foreclosure, and because of this lenders are often in no hurry to start the foreclosure process. Therefore, your house may sit for months or years before a foreclosure process begins. Even if it has begun, it can take months to finalize. Meanwhile the property remains in your name. If you have vacated your home, then it becomes rundown and an eyesore in the neighborhood and further brings down property values. In addition, you remain responsible for any personal injuries that occur on the property until your name is removed from the Deed, so it is important to keep liability insurance on the property until it is transferred out of your name.

You remain responsible for homeowner association fees and property taxes until the Deed is transferred out of your name. These obligations will attach as a lien on the house, which the buyer or lender must pay to remove the “cloud” on the Deed.

Consequences to your Credit Score: Short Sale vs. Foreclosure

A short sale is a better alternative for your credit score, as a foreclosure is included in the public records section of the credit report and remains there for up to seven years (typically from the date of filing). This is important for credit checks for employment, insurance, loan applications, and so forth. A short sale is less damaging to your credit and it is not included in the public records section of the credit report. In addition, it may be able to be removed earlier than seven years.

Contact the law office of All Family Law Group (Lynette Silon-Laguna, P.A.) to obtain information on short sales and we will advise you as to your options. We can refer you to investors with whom we have a professional relationship and who purchase short sale properties for cash. They also negotiate with the lender in an attempt to obtain a short sale agreement, which will be to your benefit, and there are no fees for this. After the short sale agreement is prepared, one of our attorneys will review the agreement for a fee that is paid at the closing -- and usually by the lender.

Initiating a Short Sale

A short sale can be initiated anytime you are unable to pay your mortgage and the home is headed for foreclosure. If you are filing for bankruptcy, a short sale can be accomplished during a bankruptcy if the automatic stay has been lifted as to the lender, or when the bankruptcy has been discharged. A short sale may even be accomplished after a Final Judgment of Foreclosure if it occurs prior to the auction sale. If so, then the Final judgment is vacated and per the FCRA the foreclosure cannot appear on your credit report.

Lenders do not have to agree to a short sale; however, the lender will usually prefer a short sale to a foreclosure if the lender believes it will receive more from the short sale than from a foreclosure sale. In addition, even if the lender may obtain less, a short sale may be quicker for the lender than a foreclosure, which will allow the lender to obtain funds for the home earlier -- and that is beneficial.

Benefits of Investor Negotiating and Purchasing Short Sales

There are many investors now who purchase short sales, some of whom will agree to negotiate the short sale with the bank. Furthermore, after the purchase of the short sale, the home will be rehabilitated, which helps to stabilize and improve neighborhoods. This increases the property values of the neighborhood and everyone benefits.

Contact Us

If you have questions regarding divorce, family law or bankruptcy, as well as foreclosure solutions, contact the law firm of All Family Law Group (Lynette Silon-Laguna, P.A.) We provide a free initial consultation, accept MasterCard, Visa, Discover and American Express, and charge reasonable and competitive rates. Furthermore, to assist you we have a team of legal assistants and associate attorneys, including a Spanish-speaking associate attorney.

Our office is conveniently located in the Riverview/Brandon area on Highway 301 South directly off of Interstate 75, near the intersection of Bloomingdale Avenue. Contact our firm by e-mail or call 813-902-3903 . We will respond immediately!

We serve all of Hillsborough County, including Riverview, Brandon, Gibsonton, Apollo Beach, Valrico, Thonotosassa, Sun City Center, Mango, Plant City, Ruskin, and Wimauma, Florida.


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