When you get to the point where you are facing foreclosure, it can be a stressful time for you and your family. The thought of losing your home can be overwhelming. On top of everything else, having a foreclosure on your credit may make it hard to own a home in the future, and can even make it difficult to rent a place to live. However, there are alternatives available to avoid foreclosure that might appeal to you. One option is a short sale. But, the question is, is it a good option?
What is a short sale?
A short sale occurs when you sell your home for less than the value of your home, which is usually also less than what you owe on your mortgage. This is only possible if the mortgage holder is willing to accept the proceeds of the sale as satisfaction of your debt.
This type of sale has positives and negatives. The biggest negative is that you will be losing your home. However, on the positive side, selling like this resolves your debt and keeps you from having a foreclosure on your credit report. Another possible negative is that your house may not sell. This can lead to the mortgage holder proceeding with the foreclosure and you having what is called a deficiency judgment.
What is a deficiency judgment?
A deficiency judgment occurs when your home is sold in a foreclosure sale and the value of the sale does not cover the costs of your mortgage. In New Jersey, the mortgage lender must file a second lawsuit against you to collect the remainder of the balance after a sale. They must do this within three months of the initial foreclosure sale.
Here is where things can get complicated for you. If you do not get the short sale agreement in writing, the lender can still sue you after the sale. While many mortgage lenders are honest in their business dealings, others are not; you are not protected by what someone tells you on the phone regarding an agreement with a creditor. That is why it is important to have an attorney protecting your interests when working with a creditor. An attorney will negotiate with your lender to reach an agreement that can help you avoid foreclosure and a deficiency judgment. As well as put you in contact with a real estate agent that can help you short sale your home if that is the option you choose.
The Law Office of Robert C. Nisenson, L.L.C. has helped clients throughout New Jersey with debt relief matters for more than 25 years. Contact 732-518-8038 for a free initial consultation to understand your options. Attorney Nisenson can help you negotiate with your mortgage lender and arrange a short sale to avoid a costly foreclosure.