Home owners are still finding themselves in trouble with their mortgages. Some are anticipating being in trouble because they can see what is coming, financially, in the future. The problem can seem complex but at some point you have to decide, do you want to go through a short sale or do you want to foreclose on your home?
A lot of people think a short sale is better because the term foreclosure has such a negative connotation in our society. Like filing bankruptcy. But the truth is, a short sale can open you up to complications you might not expect.
Each lender is different, so I suggest you do the best first step, which is, call your lender. They will give you someone to talk to about your mortgage. Talk to them if you are current but worried. Best to know your options, yes? Talk to them if you’ve missed a payment or two. Or if you have lost your job, got laid off, had a medical emergency, a divorce. Your home investment can take up a substantial portion of your monthly income. It’s worth exploring all your options before you decide on a plan.
Did you know - if you want to short sale your home, many lenders will want you to have tried to sell it first, at market value, for at least 90 days. Otherwise they think you are making a potentially rash decision to short sale.
Did you know – when you sell a home ‘short,’ if you have a phrase on your lenders’ release of the mortgage that says ‘note satisfied’ you are clear of your financial responsibilities. If not? Legally, that same lender can try to recoup the rest of what you owe for a period of five years following the sale of your home.
You can also ask your mortgage holder/lender to buy back the home from you, which is called a Deed In Lieu Of. This is usually a step taken when your mortgage lender is close to beginning foreclosure on your home. It’s worth looking into what this process can do for you.
Did you know – if you sell your home for $100,000 in a short sale when you actually still owed $150,000 that you could wind up being responsible for paying taxes on the difference (in this case, $50,000).
Foreclosures and short sales both affect your credit and your ability to buy another home in the future. The length of time may be different in each case, but it’s worth talking to a financial advisor to talk about your credit and the difference in how long it will be before the short sale or foreclosure is cleared off your credit report.
The easiest thing to do, if you live in NE Ohio, is to call a free, non profit organization like Neighborhood Housing Services of Greater Cleveland. They have an unbelievably expert staff, great communicators. I had that reiterated to me just today when a client called me to say he was so relieved to have spoken to someone at NHSGC because now he felt informed and more able to make a decision about what to do. Working with a non-profit is the way to go. They can answer any question you have, or direct you to someone who has the answer. And do not, I repeat, do not use a commercial third party organization to help you through this process. They will charge you money for what you can get free at a place like Neighborhood Housing Services of Greater Cleveland. So call them instead! Peace Out – 3C
5 responses so far ↓
1 Tim Bradford // Aug 23, 2009 at 6:19 pm
Carole, I am glad to see posted the link to Neighborhood Housing Services of Greater Cleveland, They are a great organization.
Three other things
You do need to modify the link it gives an error.
Your posts other posts here are great
And MYOAR
2 Carole Cohen // Aug 23, 2009 at 6:48 pm
Hey Tim, thank you so much for telling me about the link; I corrected it now that you have alerted me. How are you? I hope the summer is treating you well and your business well.
Thank you for the kind words, and the only thing I can’t figure out is MYOAR lolol.
3 Tim Bradford // Aug 23, 2009 at 6:58 pm
Life and Business is good there and enjoying the summer. Just think AR and then figure out the rest.
4 Lou Tisler // Aug 24, 2009 at 7:57 am
Carole,
It has been a while, but I am glad to know that even without recent communications, that my staff continue to deliver the services that people like you, Tim and others expect.
It is so important that those who are going through hardship, do not throw good money after bad; that unless you are filing for bankruptcy and are in need of a lawyer, there are too many organizations doing this for FREE and that they should not pay someone to intercede on their behalf.
Again, thanks for the good words and we are committed to continuing to do good work.
Lou
5 Carole Cohen // Aug 25, 2009 at 8:53 pm
Hi Lou ! I can almost feel the stress levels going down once my clients have talked to one of your staff at NHSGC. That’s worth it’s weight in gold. Thank you.
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