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Irina Sikela, Real Esate Broker

Short Sale

If you are currently behind your mortgage payments and now are concerned that your house may go into foreclosure, you may consider a short sale.

If you would like to sell your house but it is worth less than the amount remaining on the mortgage, a short sale may allow you to sell your house and settle your mortgage debt.

What is a short sale?

It is an “arrangement” between the home owner and the lender to approve the house sale for less money than the total amount owed to the bank. The difference between the amount owed and what the bank collects at the short sale is called deficiency.

How is short sale different from foreclosure?

In foreclosure, the homeowner falls far behind on their payments, so the bank repossesses the house and sells it. In almost all cases, the bank pursues the homeowner for the deficiency, and the only way out of this is to file for bankruptcy.

Benefits of short sale

• By completing a short sale rather than allowing your house to go through foreclosure, you will avoid eviction, and your house will not be sold at auction.

• By selling your house through a government-sponsored program (such as HAFA), you could qualify for financial assistance between $2,500 and $30,000 to help you with relocation costs.

• HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls "short" of the amount you still owe. The deficiency is guaranteed to be waived by the servicer.

• HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.

The arrangement with the bank always depends on the bank that holds the loan. Though there are general practices, every bank might do it differently.

In any case, please feel free to contact me to schedule an appointment for your free consultation. I am more than happy to assist you with all your needs.