The difference between a Short sale and foreclosure in Indiana

Short Sale or foreclosure in Hendricks County Indiana

Short Selling your Indiana real estate can be a short process or it can be a long  drawn out process!   It depends on many variables.  It can depend on the bank that you have your loan with,  the negotiator that gets assigned to your file, if all of the documents are sent in on time along with any other requested documents and bank specific addendums.     Most banks require the last name and Ln # on the top of all documents.  If you don’t  add this seemingly small request, again, it can add weeks.  I send over neat packages with a cover page that has the list of enclosed documents with the page # that specific document is on. 

    If you are missing one document it can slow everything down to a crawl and add weeks onto your possible acceptance and closing date.

  Items you need to  give to your Agent in order for your Short sale to get started is:

1.         1. Cover Page with the items enclosed.

2. .       2.The Hard ship Letter-  Short but exactly why you are in a foreclosure short sale situation.      Below are valid reasons.

   a.        Death in family

   b.       Illness

   c.        Loss of job

   d.       Income reduction

3.          3. 2 months of paystubs

4.         4. 2 months bank statement – all pages including blank

5.          5.  2 years Taxes

6.          6.   Irs form 4506-t request for tax return

7.          7. 3^rd party authorization for your Realtor to be able to talk to your bank

8.          8.  Bank specific Financial information

9.          9. The Listing and Short sale addendum

Keep in mind that you have to stay living in your  Indiana home or you could lose your short sale status, some banks will in certain circumstances will wave this requirement. 

The difference in a short sale from a foreclosure is:   (I am not a lawyer and don’t give out legal advice,  If you find yourself in a foreclosure situation,  contacting an experienced foreclosure Attorney is a very good idea.)

IRS Deficiency -  In a foreclosure the amount deficient from the loan when it sells is counted as income

          So if you owe 150,000 and its only worth 95,000   and sells for that price you would have $55,000 in income according to IRS.   In a short sale this can be forgiven. 

Bank Deficiency – In a foreclosure its not forgiven and  they can come after the deficient amount after the sell of the property.   They can ask for it immediately or wait years to collect.   Sometimes they sell to third parties this deficiency.     (Bank deficiency is not always forgiven in a short sale but a good Realtor will work hard to get the deficient loan forgiven. )   If you have an FHA loan, if accepted, it is forgiven as long as you follow their guide lines. 

Set down with an experienced Indiana short sale Realtor and discuss your options also make an appointment with a Indiana foreclosure Attorney

One of the best web sites for short sale information is Short Sale Super Stars.