Helping NJ clients navigate the process of a short sale
When people are seriously impacted by the real estate market or life’s curveballs and they cannot keep up payments on their home, they may have to consider the process of the short sale. Some people find themselves in a predicament because their mortgage is worth more than the market value of the property. Some bought at the top of the market. Some were swindled by the dangerous financial schemes that put the United States in recession. Regardless, some may have to request a short sale from their lender. If you are in a bad financial situation and a short sale is a reality for you, contact Juan C. Velasco, Esq. Velasco Law Office is ready to protect your interests and rights through the process of the short sale. Allow Attorney Velasco to serve your needs when dealing with lenders.
Short sale explained
A short sale is when a lender agrees to accept the payoff of a loan that is less than the full amount of the mortgage. It will most likely impact the debtor’s credit but not to the same effect as foreclosure or bankruptcy. A short sale is a good option when the debt is just real estate. The transaction depends on the acceptance of the lender to settle on less. If you can afford your mortgage or the lender believes you can, you will most likely be denied. The seller cannot receive any proceeds and all closing costs are covered by the bank.
The process of the short sale is complicated by the need for the lender to approve the sale. The contract and commission agreements will state that the transaction is contingent upon the approval of the lender. The general process is as followed:
- The seller agrees to an offer
- The lender approves the offer
- The seller demonstrates financial hardship
- The lender agrees to the financial hardship
- The lender conducts a “broker’s price opinion” to ensure the sale price is justified
- The lender approves or denies the short sale
Complications to the short sale
There are many variables that can impact a short sale. If there are two or more loans involved in the short sale and one of the lenders is not offered an acceptable amount, they may reject the sale. Other factors that can impact a short sale include:
- Liens on the title
- Overdue homeowners or association dues
- Liquid assets that can cover the shortage
You may still be liable for the difference
In quite a few short sales, the seller is still liable for the difference of the mortgage, also called the “deficiency.” Just because your lender has agreed to take less for the property does not mean that you are off the hook for the difference. As things change, so does peoples’ financial situations. If you are able to pay the difference in the future, your lender reserves the right to seek full payment, with a few exceptions.
Contact a Middlesex County law firm with short sale experience
When you are seriously impacted by the difference in your mortgage and the property’s value on the market, a short sale may be a reality for you. Allow Velasco Law Office to help you through a tough situation. Attorney Velasco has over 25 years of experience guiding clients through the process of the short sale. With quality legal support, you have a good chance of making a deal that appeases your lender, allowing the transaction to go through. If you need an effective attorney to help you conclude the matter in the best way possible, contact Velasco Law Office.