Northern Virginia Short Sale Sellers: Are You Financially Insolvent?
What does it mean to be Financially Insolvent?
YOUR INCOME AND ASSETS ARE NOT ENOUGH TO MEET YOUR FINANCIAL OBLIGATIONS.
It does NOT mean:
That you have money in savings to tide you over, but don't WANT to use it.
That you have money in a 401K to tide you over, but don't WANT to use it.
That you have money in investments to tide you over, but don't WANT to use it.
That have income from investments, but don't WANT to use it.
That you are upset about the value of your home in the current market and want a "do-over."
That you are upset about value of your home in the current market, took a cash-out refi when the values were higher, and don't WANT to repay that borrowed money.
The examples above are often items that people use to show RESERVES to a lending institution when they are applying for a mortgage, or a refinance. When you are in short sale situation, asking to be relieved of your mortgage, why wouldn't your mortgage holder(s) look into this RESERVE MONEY and ask for a percentage of the loan that will be unpaid, to be covered by you?
A person is truly insolvent when their income and assets are not enough to meet their financial obligations. If you are not truly insolvent, but are seeking a short sale, you will find that your lien holders may ask for a promissory note, or cash contribution to offset their loss.
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