What are the consequences of foreclosures & short sales?
This is a legal lien against a borrower for the amount required to pay the mortgage in full after the sale of a property. These are most often filed by second mortgage holders, however both lien holders have this right. You should seek the advice of an attorney & tax professional before you decide on either course of action. If you've got a second mortgage that you are looking to sell, you may want to get in contact with a second position note buyer that'll be able to give you the best price possible.
In a foreclosure, there is no one to represent you and negotiate on your behalf to be protected from a Deficiency Judgment filing. In future credit scoring analysis, banks will look at foreclosure as more negative because of a borrower's lack of cooperation.
A successful short sale will stop the foreclosure process. Once the sale is complete, your credit will show as "paid in full" or "paid as negotiated." In a short sale, there are minimal effects to your credit, provided your mortgage was not seriously delinquent (less than 30 days late). A single 90 day late can seriously damage your credit, regardless if the sale is successful or not. In a short sale, part of the transaction usually involves a full or partial release of lien that will protect you from a deficiency judgment.
Benefits of Short Sale
FREE TO YOU! M and M Realty Group's services are paid for by the bank. There are many benefits to you and your bank when short selling your home which may include:
- Avoiding the stigma of foreclosure
- Short sales costs the bank less and they recover more
- Minimal impact on your credit
- Qualify for a new mortgage in as little as 2 years. If your payments were never late, you may be able to buy another house immediately
What are your "costs" for a short sale vs. foreclosure?
With M and M Realty Group there are no out of pocket costs to hire a Short Sale Specialist. Our fee is paid by your lender. All you need to bring to the table is patience and cooperation.
The "costs" of foreclosure are many. These may include severely damaged credit, possible deficiency judgments leading to wage garnishments, social stigma, and increased difficulty in obtaining financing for a new mortgage. Losing a property to foreclosure should be your LAST RESORT.
- Credit score may drop 200-300 points
- May affect your credit for up to 10 years
- Second mortgage lien holders may pursue you for up to 6 years
- Many landlords may not rent to someone with a foreclosure
- Potential employers may see the foreclosure on your credit
If you are planning to sell your home in the next few months, nothing is more important than knowing a fair asking price. M and M Realty Group would love to help you with a FREE Market Analysis. We will use comparable sold listings (comps) to help you determine the accurate market value of your home.