Those who suffer from severe financial distress may find themselves in a situation where they can no longer pay their mortgage, putting them at risk of foreclosure. For people facing the potential risk of foreclosure, a short sale may be a way of getting ahead of the situation and protecting your interests. But what is a short sale, and when is it a good idea to consider one?
Explaining the Short Sale
A short sale, in the context of real estate law, is a type of sale that is performed whenever someone is behind on their mortgage payments and at risk of foreclosure. Rather than simply going ahead with the foreclosure, the mortgage holder can come to an agreement with the homeowner to sell the property for less than the value of the mortgage. The proceeds of the sale are then used to satisfy, in part or as a whole, the cost of the mortgage.
Why People Consider Making a Short Sale
Generally speaking, people consider making a short sale because it is often seen as a preferable alternative to the foreclosure process. The mortgage holder tends to prefer it because it allows them to recoup most of their money from the mortgage relatively quickly, rather than needing to first foreclose on the property and sell it at auction. The homeowner, meanwhile, can use the opportunity to find other living conditions without the difficulties associated with an unpaid mortgage or a foreclosure hanging over their heads.
When People Consider Making a Short Sale
People typically begin considering it when they are already into the foreclosure process. A short sale is one of several available alternatives to foreclosure that can be negotiated between the homeowner and their mortgage holder. For both parties, it can provide an option that can save a great deal of time, expense, and stress. In addition, while a short sale can hurt your credit, the impact is less than a full-blown foreclosure would be.
What to Do When Considering a Short Sale
If you are facing foreclosure and are interested in potential alternatives, such as a short sale, you should contact a lawyer with experience handling foreclosure matters. They can advise you on your potential courses of action, and help you get the best outcome possible. The sooner you call an attorney, the sooner they can get to work on your case.
At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are at risk of losing their homes to foreclosure. We will explain your options and guide you in making the best decision for your circumstances. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.
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