Why do Attorneys think Foreclosure is no Big Deal?

Don

I don't believe attorneys are always the smartest in the room...obviously!  I think a second opinion is in order!!

When you find a great attorney or home inspector or mortgage lender...hold on tight! They sure make a difference.

Don, Majority of real estate attorneys do not work with good agents, so suggesting short sale may be a risky proposition for  them. Usually in short sale by the time the Seller gets it closed, unless they kept making payments, their credit is shot anyway.

Bankruptcy and then foreclosure allows people avoid deficiency and 1099. I think it is often not such a bad advice after all. I spoke to the attorneys, and it is difficult to argue that we, agents, are maybe the only people benefitiing from short sale.

     A good Attorney is going to look at each client on an individual basis.  

     By the time many people get to the point of "short sale", they have already defaulted on their Credit Cards and other obligations.   Their credit is shot to H--- already.

     Then there is the Deficiency, which must be reported to IRS on a 1099 (isn't that nice - you went broke, moved into a studio apartment, have no job, and now IRS demands Tax on the "Income" you received from the Deficiency).

     So maybe in some cases the Bankruptcy / Foreclosure is a better route to go.

     My only advice to Sellers in Default - make sure you are dealing with an Experienced Real Estate Attorney.

The world of short sales is changing on a daily basis. I understand attorneys sometimes think they "know" what is best for the client but they fail to gives their client the educated options for them to decide for themselves what is best for them. I hate to hear a borrower tell me they filed bankruptcy a week before the foreclosure. They think it stops the foreclosure FOREVER, like they don't have to make anymore payments, they just get to keep the house. I end up knocking on the door in another month or two to tell them the home is NOW in foreclosure and they need to consider cash for keys because their attorney didn't tell them if they filed bankruptcy they either needed to make payments or they would still lose the house.

I am amazed that some attys actually passed the BAR exam!! Of course, I'm also amazed that some agents passed the real estate exam...

Don, I HOPE the attorney is taking to time to look at each case - what's lead up to the client seeking "professiona" advice?  How bad off are they?  There are 3 attorney's here in the Phoenix area who have recently had their licenses suspended for the practice of leading WAY too many people straight to the BK courts without reviewing any options that may be better for the clients.  I say HOORAH for the court systems for helping!!!!

It is completely unclear to all of us just what the credit impact of either will be in the out-years -- when many more people have been through both processes than ever before in the modern credit age.

Woudn't it be nice if attorneys were required to say: you should seek the advice of a (real estate) attorney before taking MY word for it.

Don....was just fretting over this one!   Lost a short sale as the attorney told her to file bankruptcy and let the house naturally foreclose....she could then save the money....and that short sales would happen to fast and she wouldn't have any savings and would be out in the cold!  uuggghhh  

And a deed in lieu is as bad as a foreclosure in my opinion!     So very frustrating!!!

BTW...congrats on surpassing 300k!!!

Either way, whether it's a short sale or a foreclosure, it's likely that agents are going to be paid.

Attorneys, on the other hand usually only get paid for what?  Foreclosures and bankruptcies.

Which attorneys know about about bankruptcies to really have an educated opinion?

Bankruptcy Attorneys.

I rest my case.