The Washington Department of Licensing and the Washington Department of Financial Institutions have issued a Short Sale Advisory. A Short Sale happens when a homeowner needs to sell their home, but they owe more on their home than the home is worth.
Download Shortsales-consumers
A short sale is a real estate transaction in which the sales price is insufficient to pay the debt(s) and obligations encumbering the property along with the costs of sale, AND the seller is unable to pay the difference. Every short sale is dependent upon the seller's lender(s) consenting to the transaction and agreeing to release the lender's security interest in exchange for less than what is owed. I some cased however, the lender's approval of a short sale does not necessarily mean the lender relieves the seller of liability for repayment of the entire debt.
Here are some of the highlights from the Short Sale Seller Advisory:
Before proceeding with a Short Sale
- Understand a Lender's creditors Options upon Loan Default
- Be aware of Predatory "Rescue" Scams & Short Sale Fraud.
- Contact a Fee HUD-Approved Housing Counselor or Contact Your Lender Directly.
- Utilize Free Services Available to Washington Residents
- Obtain Legal Advice
- Obtain Tax Advice
Short Sale Considerations
- First, Understand that a Short Sale May not Discharge the Debt
- You should know whether you will still owe your lender money after the short sale. You should know this BEFORE you close the sale of your home.
- Understand that a short sale may result in a higher tax debt.
- Contact a Qualified Real Estate Professional.
- Investigate Documentation and Eligibility (with you lender).
- Determine the Amount Owed On The Property.
- Determine the Estimated Fair Market Value of the Property.
- Consult Legal Counsel.
- Be Aware of the Impact on Your Credit Score.
- Understand There May Be a Waiting Period Before You Can Buy Another Home.
- Home Affordable Foreclosure Alternative (HAFA) Program.
Options other than a Short Sale
- Consider All Options
- Loan Workout
- Loan Modification
- Refinance
- Deed-in-lieu of Foreclosure
- Work Out Sale
- Bankruptcy
- Foreclosure
To see the entire text of the DOL, DFI Short Sale Advisory click this link. Download Shortsales-consumers
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