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MORTGAGE DEFAULT RESOLUTIONS
Short Sale A short sale will not help you save your home from foreclosure. A short sale means that your home is sold for less than what you owe and the lender absorbs the loss. The lender will usually only agree to a short sale when there has been a downturn in the real estate market and property values in your area have dropped. Another downside of a short sale to stop foreclosure is that you may have to declare the difference between the amount of the short sale and your mortgage balance as income on your taxes. To be on the safe side, you should check with your tax advisor before agreeing to a short sale. You can then make an informed decision. There is also another problem with using a short sale to stop the foreclosure process. You may still owe the bank or mortgage company some money. Depending on the state where you live, the lender might be able to pursue a deficiency judgment against you for the shortage between what you owe and the sale price of the property. So, if you choose to go the route of a short sale, you should negotiate with your lender to accept it as "payment in full" and get the agreement in writing. Check with your attorney to see if your state allows deficiency judgments on foreclosure of your particular type of real estate loan. |