One of the largest expenses most families have each month is their mortgage payment. So when money gets tight, it is only natural to try and figure out how to reduce expenses so necessities can be paid for each month. But when there is no wiggle room and you are unable to find a way to keep current on your house payment, the lender will start the foreclosure process. If that happens, you do have some options that will stop the foreclosure action dead in its tracks, and still get you the relief you need.
Two popular options to deal with foreclosures are by doing a short sale of your home, or giving the lender a deed in lieu of foreclosure. These are two very different things, and before you make a choice about what to do, it is best to understand the differences:
• A short sale is a process whereby the lender agrees to allow the home to sell for less than what is owed. The tricky part here is that the amount of debt “forgiven” can be charged as income to the borrower. If that happens, you will have to report the difference as income on your taxes. In order to make sure a short sale makes the most sense, it is always a good idea to have a qualified bankruptcy and debt management attorney negotiate on your behalf.
• A deed in lieu of foreclosure is a process whereby the homeowner agrees to sign a deed, giving the home back to the bank. This document puts title back in the name of the lender, and can be done instead of going through the foreclosure process. There are some title requirements that go along with this option, and not all banks will accept a deed in lieu of foreclosure. If you are thinking about going this route, you will want to have a skilled attorney help you.
If neither of these options appeals to you, you can also consider bankruptcy. In fact, bankruptcy might be a more attractive option if your lender is unwilling to waive any deficiency balance that might remain after a short sale, or is going to demand payment of that amount once you deed the property back to them and it sells for less than what is owed at remarketing. For help deciding what to do to save your home, or to get out of a foreclosure, call us today.
For more information about foreclosures, short sales, and bankruptcy, contact us today at www.DsouzaLegalGroup.com. We will go over the facts of your case and let you you’re your next step.