Florida Short Sale Attorney
What is a short sale?
If you are dealing with threats of
creditor harassment, or crippling debt, a short sale may be a good option for you. Unlike
foreclosure, a short sale allows you as the owner to sell your own home
and then give the proceeds to the lender. A foreclosure involves the bank
or other creditor seizing your home without any thought to you. By definition,
a short sale means that the amount the property is sold for will not be
enough to cover the sum that is owed. However, the creditor will often
forgive this deficiency as it means that they will get most of their money back.
A short sale can benefit both the debtor and the creditor. It involves
less time, expense, and hassle to both parties. It gives the debtor a
fresh start and it gives the lender a repayment that they may otherwise
not have received. It also helps buyers and the housing market as they
are able to purchase a home at a sometimes greatly reduced cost. More
and more families in Florida are choosing the option of short sale. However,
it is not the only way to be free from debt and there are
pros and cons to consider.
Dos and Don'ts of Short Sales
In order to ensure that the short sale process goes smoothly, there are
some dos and don'ts that could make all the difference in the outcome
of your case. First of all, don't forget that there will be various
closing costs in the sale of your property. Attorney fees, property taxes,
delivery fees, notary fees, and more will need to be added in to the amount
that you can give the creditor. Do remember that if you chose not to sell
your home through a real estate agent, you will cut down on costs. Lastly
don't forget that the IRS may become involved. They may treat the
sale as income as they are a form of debt relief. In order to avoid these
pitfalls and make the best decisions, having an experienced legal representative
on your side could be an invaluable benefit.
WHAT IS A SHORT SALE?
A short sale occurs when a property sells for a price that is insufficient
to pay back the loan(s) secured against it (or any other liens against
the property, such as delinquent property taxes, Homeowners/Condominium
Association fees, etc.) as well as standard sales closing costs. In such
a case, in order to complete the sale, you, as a Seller, must either:
(1) come to the closing with sufficient cash from other sources to cover
these shortfalls; or, (2) your lender(s) must agree to forgive all or
a portion of the amounts you are "short" or make other arrangements
for repayment (such as execution of a promissory note). This second alternative
is commonly known as a Short Sale. Your lender will generally not allow
you to receive any proceeds or otherwise obtain any monetary benefit as
part of a Short Sale.
WHAT OTHER OPTIONS MAY BE AVAILABLE OTHER THAN A SHORT SALE?
Depending upon your financial condition and other factors such as other
liens against the property and available interest rates, you may be able
to negotiate a modification of your loan(s), refinance, deed the property
back to the lender(s) in lieu of foreclosure, or declare bankruptcy in
lieu of attempting a Short Sale. You may also be eligible for government
assisted refinancing options such as FHASecure (for more information call
1-800-225-5342) or visit
www.hud.gov. Other options may also be available depending upon your individual circumstances
and you should consult with legal, tax, credit or financial advisors to
help you evaluate these options and determine whether any others may exist
and be more appropriate for your circumstances.
WHAT IS THE PROCESS FOR GETTING A SHORT SALE APPROVED?
There is no universal set of rules or regulations that determine whether
you are eligible for a Short Sale or whether your lender(s) will approve
a Short Sale. Each lender is different and each has established their
own criteria, which may or may not be favorable to you. Some lenders will
not communicate with anyone but you regarding a possible Short Sale, and
others may not discuss the possibility of a Short Sale unless you are
in default, or until a contract offer is presented. The basic general
steps in the Short Sale process after listing the property for sale are:
Proving Financial Hardship: You must typically prove to your lender(s) that you are experiencing
financial hardship and will be unable to continue making loan payments.
In some, but not all cases, you may already be in default of your payment
obligations. Most lenders will require you to provide specific information
such as a financial affidavit, tax returns, bank statements, and pay stubs
in order to prove financial hardship.
Determining Property Value: Once you have proven a financial hardship, you must be able to demonstrate
that the property is worth less than the total amount owed to your lender
and any other lien holders. Frequently, your lender will require a Broker's
Price Opinion (BPO) or Comparative Market Analysis (CMA) from a Realtor,
and it may also order an appraisal of the property from a licensed appraiser
of their choosing. In some cases, you may be responsible for this expense.
Finding a Buyer: A qualified buyer must submit an offer to purchase the property, which
is then submitted to the lender for approval. Each lender with a mortgage
or lien against the property must approve of the potential purchase to
the extent that their loans will not be paid in full at closing. Many
lenders will not even consider a Short Sale, review the property's
value, or evaluate your financial hardship until a bona fide offer to
purchase is received.
Final Approval: Once your lender acknowledges your inability to continue satisfying your
payment obligations and the fact that the property is not worth as much
as the loan(s) secured by the property, you or your representative must
convince the appropriate decision makers at each lender that it is in
their best interest to approve the Short Sale. Most lenders have a specific
department that handles these requests which is commonly referred to as
either the Loss Mitigation, Pre-foreclosure, or Loan Workout department.
HOW WILL I KNOW IF MY LENDER HAS APPROVED A SHORT SALE?
In all likelihood your request for a Short Sale will be subject to different
levels of approval by your lender. At various times throughout the process,
you (or your representative who is communicating with your lender) may
be told or otherwise get the impression that your lender views your request
favorably or believes that it will be approved. However, you should not
assume that a Short Sale has received Final Approval unless and until
you have written confirmation from the lender setting forth its approval
and all of the specific terms of the compromise. Your lender will in all
likelihood have the ability to withdraw its approval up until that time
or perhaps later. If your Short Sale is approved, you should inform your
Realtor immediately and the approval should be provided to the settlement
agent so that they can prepare the appropriate documents needed for the
closing of the transaction.
HOW LONG WILL IT TAKE TO GET A SHORT SALE APPROVED?
Every Short Sale situation is different, depending on your individual circumstances,
the nature of the loan(s) and other liens against your property, and your
lender's criteria and staffing. If your lender will consider a Short
Sale prior to the submission of an offer to purchase, the process may
take less time because you should be able to provide your lender with
all of the required documentation in advance and the lender may order
an appraisal of the property sooner. Even if your lender will not consider
a Short Sale prior to submission of an offer, you should have all of your
financial information (mortgage documents, bank statements, pay stubs,
tax returns, etc.) organized and immediately available to avoid unnecessary
delays. In the current market environment where Short Sale requests are
occurring with much greater frequency, your lender may not be able to
respond to your inquiry or evaluate your request as quickly as you would
like. While some lenders are able to review and approve Short Sale requests
quicker than others, many lenders take at least 3-4 weeks, if not longer.
In addition, it is important to understand that there is no assurance
that your lender will approve of your Short Sale request. You should begin
to consider any and all other options available to you now in the event
your request is denied.
Contact a Florida short sale lawyer today!
LeavenLaw has experience in every area of
bankruptcy and foreclosure law. We have handled countless cases and know exactly
how to protect the best interests of their clients. If you would like
to speak with a
Florida attorney from our team, please do not waste any time in contacting us. We will
examine every aspect of your case in order to find the best solution for you.
For a free case evaluation,
contact a Florida short sale lawyer from our team today. Do not wait to get the assistance you need to get
a clean slate.