If you are a homeowner experiencing financial hardship and struggling to pay your mortgage, you need to act quickly to avoid foreclosure. An experienced short sale attorney can help you explore your options and ensure that your best interests are protected during this distressing period. While entering into a short sale agreement will still mean losing your home, it is much better than going through the foreclosure process. With a trusted short sale attorney representing you, you can negotiate a favorable outcome that allows you to move on with your life.
What Is Home Foreclosure?
Most homeowners enter into a mortgage agreement to buy their home and are required to make monthly mortgage repayments to their lender until the mortgage is fully repaid. If a homeowner (the borrower) fails to keep up with their mortgage payments – whether due to job loss, illness, or another source of financial distress – their lender has the right to commence foreclosure proceedings. Home foreclosure is essentially the process through which the lender attempts to recover the amount outstanding on the mortgage by selling the mortgaged property at an auction.
Generally, lenders will commence foreclosure proceedings when the borrower has missed three mortgage payments, although some commence proceedings after a single missed payment. They may file a document called a ‘notice of default’ at the county recorder, officially notifying the borrower that they are in default and setting out the timeframe they have to catch up on missed repayments before further action is taken. If you have received a notice of default, you must contact an experienced attorney immediately. They will advise you on your options for avoiding foreclosure and arranging a more favorable solution to your financial predicament.
What Is A Short Sale?
A short sale occurs when a homeowner, with the agreement of their lender, sells their property for an amount that is less than the amount outstanding on their mortgage (i.e. the sale falls ‘short’ of settling the loan balance). For example, if you default on your mortgage and still owe $200,000, and you find a purchaser who agrees to buy your home for $170,000, your lender may agree to the sale and release you of your obligation to pay the remaining $30,000. Some homeowners also negotiate short sales when the value of their home has dropped and they want to sell the property quickly without waiting for property prices to recover.
What Are The Advantages Of A Short Sale?
Negotiating a short sale is one of the main ways that homeowners can avoid foreclosure on their home. A major advantage of entering into a short sale agreement to avoid foreclosure is that you as the homeowner will remain in control of the sale process (whereas during foreclosure, you lose all control to the lender). A further advantage is that short sales typically have a less severe impact on your creditworthiness, whereas a foreclosure can be very damaging to your credit score. Foreclosures also remain on your credit record longer than short sales do, so they have a greater impact on your financial future. Short sales also tend to involve lower fees and costs for both the borrower and lender than foreclosures do.
However, concluding a short sale agreement takes legal finesse: there are several pitfalls to be avoided, and securing your lender’s agreement can be very challenging. Hiring a skilled short sale attorney is a must if this is an option you are considering.
What Is The Role Of A Short Sale Attorney?
Short sales are complex legal transactions that involve multiple processes and require a range of skills to be executed successfully. Your attorney will play a vital role throughout the short sale process.
Negotiation
A short sale is only possible if your lender agrees to it. Obtaining your lender’s approval is usually the biggest stumbling block to effectively concluding a short sale agreement, and it takes a seasoned negotiator to get a deal over the line. Your short sale attorney will put together a short sale package for your lender’s consideration, and negotiate the forgiveness of the debt remaining on your mortgage. If you conclude a short sale without your lender’s agreement to forgive the remaining debt, they are entitled to go to court and obtain something called a ‘deficiency judgment’ against you. This means that you will still be liable to your lender for the amount outstanding on your mortgage after the short sale, and your lender may be able to execute against your other assets to recover the outstanding amount.
Risk Mitigation
There are a number of legal risks involved in short sales (and in property transactions more generally). A skilled attorney will protect your interests by negotiating a short sale agreement that is legally binding and favorable to you as the seller, ensuring that the sale meets the strict requirements of Florida real estate law. They will also conduct a thorough due diligence of the buyer, and help you to limit your potential liability if the transaction falls through for reasons beyond your control. Your attorney should also advise you on the potential tax implications of concluding a short sale agreement, and refer you to a tax specialist if necessary.
Documentation
Your short sale attorney will need to draft and review highly technical legal contracts to facilitate your short sale. Significant paperwork is involved in any property transaction, but short sales involve an even greater administrative burden. Your attorney will take care of all contract drafting and preparation, file the necessary documentation at the county clerk’s office, and manage all correspondence with the lender’s and buyer’s attorneys. They will also ensure that the short sale progresses as quickly as possible and take care of any legal or administrative hurdles as they arise.
General advice
Short sale attorneys are generally excellent advisors for anyone facing foreclosure proceedings because they have a wealth of experience in negotiating with lenders on behalf of homeowners. Even if your lender does not agree to a short sale, your attorney can help you negotiate an alternative arrangement that will avoid foreclosure, such as a mortgage workout, loan reinstatement, or deed-in-lieu of foreclosure.
An Experienced Short Sale Attorney Can Help You To Avoid Foreclosure In Coral Springs
The team at the Law Offices of Gary I. Handin, P.A., has helped hundreds of South Florida families avoid foreclosure and successfully negotiate short sale agreements with their lenders. Our short sale attorney has several decades of experience in real estate law and foreclosure defense and represents clients facing foreclosure with compassion and care.
If you are in financial distress and need to speak to a trustworthy attorney to understand your options, we are your first port of call. Contact us today at 1-877-815-4560 to schedule a consultation or find out more about our wide range of legal services.