Avoid Foreclosure with a Short Sale | Saint Louis Real Estate Agents ...

Foreclosures are a long and expensive process which devastates the homeowner?s credit, depresses property value, blights neighborhoods and results in huge losses for lenders and homeowners. Short sales tend to produce financial and nonfinancial rewards for all parties involved they; protect the homeowner?s credit, keep properties occupied therefore eliminating blight situations, produce a happy buyer, minimize losses to lenders and allow lenders the opportunity to avoid taking back distressed property.

Millions of homeowners are behind on their mortgages and can no longer make their payment due to many extenuating circumstances. If the financial institute decides to foreclose the borrower will be responsible for any deficiency judgment and the homeowner?s credit will be in shambles. In a short sale, the homeowner can request the lender to accept an amount below the mortgage payoff and waive the deficiency against the homeowner. In most cases, all closing costs are built into the deal where the lender pays the closing costs. All short sales are handled on a case by case basis. However, lenders will demand fair market value for their property, which is greatly below the mortgage balance.

The credit implications of a foreclosure are astounding. A homeowner should proceed with a short sale to protect their ability to obtain financing in the future. Most short sales result in a ?settlement? status on their credit report as opposed to ?foreclosure?. Typically a borrower who opts for a short sale, can obtain financing for a new home within a couple of years. However, in a foreclosure, the foreclosure will remain on the credit report for seven years, making it difficult to obtain a new home loan, a car loan or credit cards. And if financing is granted, it is often at a very high interest rate.

When faced with the decision, the best bet is to try to proceed with a short sale. If you have any further questions about short sales, foreclosures or any other home buying or selling needs, please feel free to contact one of our experienced agents who are ready to assist you at (314) 802-0797.

Source: http://www.hermannlondon.com/blog/avoid-foreclosure-with-a-short-sale/

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