What Is a Short Sale?

 Posted on May 26, 2023 in Foreclosure

Making any kind of investment comes with a certain degree of risk. Unfortunately, home ownership is not an exception to this rule. When an individual makes a decision to take out a mortgage, they do so knowing that if they cannot keep up with their payment schedule, their lender may foreclose upon the home. As even the most hardworking and financially responsible individuals can find themselves falling on hard times through no fault of their own, foreclosure is a real risk for virtually anyone who has not yet paid off their mortgage in full. When this risk becomes a reality, pursuing a short sale may be the best way forward.

A Way Out When a Home Is Underwater

Generally speaking, foreclosure is a situation that should be avoided. When a lender forecloses on a homeowner, that homeowner simultaneously loses all of the equity that they have invested in their home and sustains a major hit to their credit score. It is, ultimately, very difficult for those who have been foreclosed upon to purchase new real property for years after a foreclosure.

As a result, if a mortgage is underwater – as the balance of the mortgage exceeds the value of the home – and foreclosure is all but inevitable, pursuing a short sale can serve as a way to avoid the credit-related consequences of foreclosure.

Homeowners who are interested in pursuing a short sale must generally obtain permission from their lender(s) before they can commit to this course of action. If that permission is granted, they can then sell their home for less than what is owed on their mortgage. Once the sale is complete, the lender will either forgive the deficiency balance owed by the borrower or they will seek repayment of it. Proactively negotiating how the deficiency balance will be treated after the sale is complete can help to preserve the financial interests of any borrower who is interested in pursuing a short sale.

Speak with a Knowledgeable San Antonio Bankruptcy Lawyer for More Information

If your home is at risk of being foreclosed upon, it is time to explore your legal options. Our firm’s reputable San Antonio, TX bankruptcy lawyer offers free case evaluations because he believes that no one should be denied the ability to make informed decisions about a legal matter simply because they are struggling financially. As a result, you can schedule a consultation at the Law Offices of Chance M. McGhee at no cost simply by submitting a contact form on our firm’s website or by calling 210-342-3400.

A short sale may or may not be the best option for your unique circumstances. By exploring the debt management and debt relief opportunities available to you, you can choose your next steps with greater confidence. Our team looks forward to meeting with you.

Source:

https://www.rocketmortgage.com/learn/what-is-a-short-sale