If you are a home owner and are having trouble makeing your mortgage payment and are heading to Foreclosure, there may be other options that could be available to you.
A foreclosure will leave a negative mark on your credit report and you go threw the process of your name being posted in the local news paper. There could be another alternative to Foreclosure that you may want to concider that is called a Short Sale.
A Short Sale is where your lender will allow you to sell your home for a discounted payoff amount instead of a Foreclosure. There is a process that must be followed and this can take 45 to 90 days to get an approval. The lender will evaluate your situaltion and see which way will have the most savings to the lender.
You ask why would the lender want to do a short sale instead of foreclosing on the property ?
Here is a example why the Short Sale would be better for the lender.
Short Sale Senario Foreclosure Senario
$110,000 Actual Loan Amount $110,000 Actual Loan Amount
$100,000 Actual Market value $100,000 Actual Market Value
$8,000 Commission and Closing Cost $1,500 Legal Fees
$92,000 Amount left to Satisfy the lender $4,500 Lost Interest
($18,000) Amount the Lender would discount the Mortgage $3,000 Taxes, Insurance, Maintanece & Utilities
$8,000 Commissions and Closing Cost
$83,000 Amount left to Satisfy the lender
($27,000) Loss to the Lender
By doing the Short Sale the Lender SAVINGS are $9,000
It can take 9 Months for a Foreclosure and Real Sale of the home
By the lender allowing the resale it also is a benefit to the borrower as they do not have a foreclosure on the credit and the do not have there name posted in the local news paper.
Are there a Possibility Tax Consequences..... YES it could be..... Stay Tuned.....
If you would like more information on Short Sales, please contact
Roland Woodworth of Exit Realty Clarksville
RolandWoodworth@TopProducer.com
www.ClarksvilleHomeInformation.com
Roland is Licensed in both Tennessee and Kentucky.
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