Wednesday, April 27, 2011
Thursday, April 21, 2011
Short sale vs. foreclosure
There are many legitimate reasons why a homeowner may find themselves in a position where they’re unable to continue paying for their home. And when confronted with this circumstance, a loan modification may be a solution. Yet successful loan modifications are unfortunately not very common. Subsequently some homeowners will ride the foreclosure process out until they eventually have to abandon the property, or they’ll short sell it and move on.
A common question that I get from consumers is “should I do a short sell, or just walk away from the property”. Fact is that there is no one correct answer and people should always consult with an attorney and/or tax adviser before doing anything. That being said, let’s dispel a very commonly held belief. And that is, that other than ruining one’s credit, that there are no additional repercussions in walking away from a property. Based upon my consultations with various attorneys, I can confidently tell you that this if FALSE. Let’s presume that you owe $200,000, you let the property go into foreclosure, you lender repossesses it, and then turns around and sells it at today’s market value of $100,000. Who can they come after for the $100,000 deficiency? YOU, the borrower is likely on the hook. What they can do is get what’s called a deficiency judgment for the $100,000. They can then, if they’re unsuccessful in collecting from you, sell this judgment to a collection agency, who may then sell it to another collection agency and so on, and so on. Furthermore, deficiency judgments can haunt you for up to 20 years; long after your credit would have otherwise recovered!
A short sale may alleviate you from this scenario, particularly if the property is your primary residence. In many cases, my experience as well as that of my colleagues, has been that lenders will waive the deficiency and allow you to walk away free and clear. As a matter of fact, we’re even seeing the waiving of deficiencies on second homes and investment properties. Not to mention, that your credit rating will recover considerably sooner in a short sale scenario. And even in the event that your lender does not waive the deficiency, they may be willing to either reduce the deficiency amount and/or work out a payment plan. Whatever the case, almost anything beats a deficiency judgment. In conclusion, a short sale just may be the difference between having some control versus absolutely no control of an otherwise terrible situation.
A common question that I get from consumers is “should I do a short sell, or just walk away from the property”. Fact is that there is no one correct answer and people should always consult with an attorney and/or tax adviser before doing anything. That being said, let’s dispel a very commonly held belief. And that is, that other than ruining one’s credit, that there are no additional repercussions in walking away from a property. Based upon my consultations with various attorneys, I can confidently tell you that this if FALSE. Let’s presume that you owe $200,000, you let the property go into foreclosure, you lender repossesses it, and then turns around and sells it at today’s market value of $100,000. Who can they come after for the $100,000 deficiency? YOU, the borrower is likely on the hook. What they can do is get what’s called a deficiency judgment for the $100,000. They can then, if they’re unsuccessful in collecting from you, sell this judgment to a collection agency, who may then sell it to another collection agency and so on, and so on. Furthermore, deficiency judgments can haunt you for up to 20 years; long after your credit would have otherwise recovered!
A short sale may alleviate you from this scenario, particularly if the property is your primary residence. In many cases, my experience as well as that of my colleagues, has been that lenders will waive the deficiency and allow you to walk away free and clear. As a matter of fact, we’re even seeing the waiving of deficiencies on second homes and investment properties. Not to mention, that your credit rating will recover considerably sooner in a short sale scenario. And even in the event that your lender does not waive the deficiency, they may be willing to either reduce the deficiency amount and/or work out a payment plan. Whatever the case, almost anything beats a deficiency judgment. In conclusion, a short sale just may be the difference between having some control versus absolutely no control of an otherwise terrible situation.
Wednesday, April 6, 2011
CB Home Loans Mortgages Tamed Video
This is one of the best promotional videos for a mortgage company that I've ever seen...
Subscribe to:
Posts (Atom)