Short sales are becoming a more common solution for homeowners to relocate. Recent legislation has made it more difficult to process foreclosures, yet many banks still find that they have a backlog of homes. Unable to clear the backlog through traditional foreclosure, many may be more open to short sales. These factors can empower you.
Newport Law offers workout options with foreclosure defense tools, including short sales. If appropriate, a short sale attorney can negotiate with your lender and a real estate broker to help you set your debt aside.
California Short Sale Lawyer
If you’re at risk of default, a short sale, where the lender agrees to sell a property for less than the mortgage balance, may be worth considering. Legislation now protects sellers from lien holders, making this option more viable than ever.
Short sales will always be more complicated than traditional home sales. Newport Law can help guide you through the process. We’ll outline your tax obligations and the impacts on your credit. We’ll help you understand the lenders’ responsibilities. We’ll defend your rights before and after the sale.
Frequently Asked Questions
WHAT IS A SHORT SALE?
A short sale occurs when the property is sold for less than the loan amount with the cooperation of the lender. Not all lenders will approve a short sale and not all owners or all properties qualify for short sales.
WHAT ARE THE QUALIFICATIONS FOR A SHORT SALE?
Both your property and you have to qualify for short sale consideration.
HOW DOES THE PROPERTY HAVE TO QUALIFY FOR A SHORT SALE?
Comparable sales must substantiate that your home is worth less than the unpaid balance of your loan. Broker Price Opinion letter will determine.
HOW DO I QUALIFY FOR A SHORT SALE?
You must prove a hardship that makes it impossible to continue making loan payments. A hardship is the result of a circumstance beyond your control that forced you into a position where you can no longer afford loan payments. Hardships include:
- a. Unemployment or loss of a primary income source
- b. Inability to work due to health crisis
- c. medical expenses
- d. Employment relocation
- e. Business failure
- f. Bankruptcy
- g. Death of spouse or significant other
- h. Divorce or separation
HOW WILL A SHORT SALE IMPACT MY CREDIT?
A short sale coupled with 90 day late pays will damage your credit almost as much as a foreclosure. However, Fannie Mae has stated that you will be able to obtain a home loan in two years after short sale whereas you will have to wait about seven or more years following a foreclosure.
WILL I HAVE LIABILITY FOR THE DIFFERENCE BETWEEN MY LENDER PAY OFF ON SHORT SALE AND THE LOAN AMOUNT?
If the approval letter releases deficiency rights, you will not have deficiency liability.
IF MY LOAN IS NON-RECOURSE, WILL I RECEIVE A 1099-C FOLLOWING SHORT SALE?
Yes, There are other exemptions you may qualify for, such as the insolvency exemption. You may still have to report debt relief on your state return, however, unless your state has parallel exemptions available.
HOW LONG DOES A SHORT SALE GENERALLY TAKE?
It should not take longer than two to three months to obtain an offer.