Article: You lost your house - but you still have to pay
Scary stuff for homeowners who face foreclosure. Unfortunately, we have seen foreclosure rates increase over the past few years due to the mortgage crisis and economy. In order to avoid the type of situation outlined in the article above, where the previous home owner was held responsible for the short-fall of the home sale by the bank after foreclosure, be sure to get the right advice.
Today's market consists of between 7-10% of distressed home owners. This translates into a domino effect on market prices and real estate values. Anywhere from 50-80% of a given market's closed sales can be a distressed property (short sales and foreclosures). By definition, a short sale is a situation where the home owner owes more money on the home than it's current market value and can no longer stay current with their mortgage payments. A foreclosure property is one that has already been re-possessed by the primary lien holder (in most cases being the mortgage lender).
Realtors are taking a larger role in working with home owners who are in distressed properties (aka in default or pre-foreclosure) to help them avoid the "worst case scenario" of losing their home or facing bankruptcy. In most states, real estate agents are not attorneys, so it's also important to find a knowledgeable attorney to work with. Agents who have received specific training in handling "short sales" (i.e. Certified Distressed Property Expert) can help troubled home owners avoid foreclosure and sell their home using a "short sale". Trained agents can also help home owners think through and explore other options that may help them keep their home. Agents should explain all of the paper work that needs to be signed and should keep the client's best interest in mind, which includes protecting the client from any future liabilities (i.e. deficiency judgments). As always, trust and professionalism should play the biggest factor when choosing and agent to work with.
No one wants to lose their home, so if you or someone you know is in financial trouble be sure to get the right advice before it's too late!
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