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Photo of attorneys Shelley Slafkes and Bruce Levitt
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What is a Short Sale?

On Behalf of | Jun 3, 2016 | Foreclosure Saving Your Home

When a homeowner is struggling to pay his or her mortgage, it is important to consider every debt relief option. One effective option for homeowners to consider is a short sale, which involves the mortgage lender agreeing to allow the homeowner to sell the property for less than what is owed on the mortgage. A mortgage company is typically agreeable to accepting less money in order to avoid the time and expense of foreclosure. Although the amount recovered by the mortgage lender in a short sale leaves the lender “short,” it also saves the company a substantial amount of money by avoiding the foreclosure process, so it is often a tempting option for mortgage lenders.

During the short sale process, the homeowner remains the owner of the property and is responsible for selling the home. However, the sale of the house cannot be finalized without approval of the mortgage company. The dual approval process to consummate the closing of a short sale can take a lot of time, so it is extremely beneficial to work with an attorney experienced in handling short sales.

One of the most important factors in convincing the mortgage company to allow you to short sale your home is to demonstrate undue hardship. Common examples of undue hardships are unemployment, divorce, serious medical emergency, bankruptcy or death of a loved one. Before you write a short sale offer, you should obtain a list of comparable sales. The bank or mortgage lender will not release you from your mortgage obligations without assurances that it will be paid close to market value.

Finally, a New Jersey homeowner can be held liable for the amount the mortgage lender is left “short.” Thus, it is important to negotiate the lender’s waiver of its right to obtain a deficiency balance against the homeowner as part of the short sale agreement.

If you are interested in avoiding foreclosure of your home with a short sale, we can help. Now is the time to schedule a free initial consultation with a New Jersey short sale lawyer at Levitt & Slafkes, P.C. Contact our attorneys online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation.