Receiving notice that your home has gone into foreclosure is a frightening experience. Without a roof over your head it is hard to live a normal life, or to give your family the shelter they need. But, with a sluggish economy, the number of foreclosures is again beginning to rise and finding ways to stay in your home is becoming more important than ever. One answer is to try and work with the lender by offering to pay off the debt, but very few people are in a financial positon to make this happen. This leaves many homeowners searching for alternatives, such as bankruptcy or refinance. However, another popular option is to offer the lender a short sale.
A short sale is a transaction whereby the lender agrees to take less than what is owed on the home, and will release their lien. Going this route will not keep you in your home though, and should only be considered if you are prepared to find housing elsewhere. What you will accomplish is a resolution to your mortgage that does not include a foreclosure. Just be sure to watch out for these common missteps:
- Do not do any damage to the home, as you will be responsible for the cost of repair and may even face charges of vandalism.
- Be sure to get the terms of the sale in writing with your lender.
- Be on the lookout for the possibility that the amount of debt that is forgiven will be considered income, and may be reported by your lender to the IRS as such. This means you will have to pay taxes on the amount of the loan that is forgiven.
Keep in mind your lender does not have to agree to a short sale, and the process can be long and tedious. If you are facing a short time frame, whereby your home is set for foreclosure sale quickly, a short sale may not be right for you. You do have other options, and should explore those options with a qualified debt management attorney. Call our office today to find out more about short sales, and how they impact a foreclosure proceeding.
Call a Plantation, Florida debt relief attorney today for more information on foreclosures and short sales, and what to do when your budget doesn’t work. Schedule an appointment to learn more.