The big question is, “Should I short sale, let the property foreclose or maybe file bankruptcy?” If you are pondering whether to apply for a loan modification, agree to a short sale or just let the property go into foreclosure, PLEASE READ THIS.
Remember, you are not alone. Hundreds of thousands of people were victims of the Real Estate bubble. Some have already resolved their problem, but others were either paralyzed by the fear of losing their home, tried options that did not work or just did not want to deal with it. As this crisis has “matured,” there is more assistance than when it first erupted. First, speak with your attorney and accountant. They can give you the advice you need for your particular situation. This is an important decision and one that needs to be made for peace of mind, if for no other reason.
As a Certified Distressed Property Expert, I can tell you from experience that there is no precedence for the upheaval the market has seen. Having experienced working with properties in foreclosure, I have found that the best solution by far is a short sale. If you know of ANYONE who has been successful with a loan modification that had favorable terms in the long run for the owner, call me. It would be a first. If you or someone you know has paid hundreds of dollars to find out that a loan modification was either not feasible or was rejected, do not call me. Sadly, I already know too many people who have been taken for the loan mod ride. The lack of results is shameful.
For most owners, a short sale is preferable to a foreclosure. Although both can negatively impact your credit score, in a short sale, the owner made the effort to do the right thing. Future loans may depend on this effort. Banks are unwilling to negotiate deficiency judgments with the homeowner after a foreclosure. A foreclosure does not indicate “best effort” to better the situation for homeowner and lender.
Walking away from a property does not instill trust in a future lender. Foreclosures can not only hurt the future loan worthiness of the defaulting homeowner but also is bad for the neighborhood. If embarrassment enters into your decision, you can short sale your home without broadcasting it with yard signs and lockboxes. It can be a completely confidential transaction.
Once you have made the decision to short sale your home, condo or investment property, I recommend you call a Realtor who is a Certified Distressed Property Expert trained to handle the sale. We have the special skills to work with the seller through the complicated steps of the process.
With the thought in mind that many homeowners will become renters, I have this to say: LANDLORDS – LISTEN UP! The wisest property manager I know has filled her buildings with families who lost their homes in short sales. She has found that people who had short sales had an impeccable credit history until their credit score was hit because of the inability to pay the mortgage. These folks have pride of ownership and a history of meeting their financial obligations. Short-sighted landlords only look at the credit number and never take the time to find out the true credit history.
This is a great time for landlords – especially if your tenants are responsible people who went through the short sale process and did not just walk away from their homes. Don’t tell them they can never go home again! Let them click their heels three times and say: “There’s no place like home.”
For more information, Call Cindy Abraham at 954-895-1617.
