Just a little tidbit on Short Sales.
When a borrower is experiencing economic hardship the lender may agree to a short sale. This is basically discounting the loan balance to help the borrower out. When a borrower is interested in a short sale they should talk with the lender's loss mitigation department to negotiate a deal. Not all borrowers will be eligible The borrower/homeowner will sell the real estate for a price that is less than the loan balance and the money from the sale go to the lender and satisfy the debt in full. In a short sale, the lender determines whether a proposed sale is worthwhile or not.
A loan balance is not always discounted for a short sale and the circumstances surrounding the borrower's situation play a big role in whether a short sale is approved or not. Generally, the real estate market and the borrower's personal finances will affect the decision.
Generally, the reason a bank will accept a short sale is to help the borrower avoid a foreclosure on their home. When the bank believes that selling the home in a short sale would save them more money than a foreclosure would then they will agree to a short sale. The homeowner benefits significantly from this arrangement, too, because they have some control over the deficiency as well as avoiding having a foreclosure on their credit report. In most cases, a short sale is faster than a foreclosure and costs less money. This is why banks are willing to accept it. In general, a short sale is simply negotiating the amount of money owed on the loan down to an acceptable amount so the homeowner can sell the home and pay off the debt
Comments(0)