If your home is currently at risk of going into foreclosure, or if you are unable to continue making your mortgage payments and want to take steps to avoid foreclosure, one of the options you might be considering is a short sale. It is important to understand that a short sale is different from a traditional home sale, and there are certain steps you will need to take if you want to do a short sale in Illinois. An experienced Oak Park foreclosure defense attorney at our firm can talk with you today about planning a short sale and moving forward with a short sale in order to prevent foreclosure. In the meantime, the following are the general steps you should be aware of when it comes to doing a short sale in the Chicago area.
Understand What is Involved in a Short Sale
Before you take any steps toward doing a short sale, it is essential to understand what is involved in the process. A short sale is generally for homeowners who have underwater loans and cannot make their mortgage payments. With a short sale, you will be entering into an agreement with your lender to sell your house for less than what you owe on the mortgage, and the lender will agree to accept the amount for which the house sells and, in most cases, forgive the remaining amount of mortgage debt. A short sale will impact your credit, and you will not be able to keep your home, but it will have less impact on your credit than if your house goes into foreclosure and is sold through a foreclosure sale.
Determine if You Need to Do a Short Sale
You should work with an attorney who can help you to determine whether a short sale is necessary. In most situations, it is possible to estimate the likely sale price of the house, and to account for the unpaid mortgage balance and any costs associated with the sale. If it looks as if you might still make any money from the sale or might come out even, a short sale is likely not necessary. If money will still be due after a sale of the house based on the estimated selling price, you may need to move forward with a short sale.
Contact Your Lender
Once you decide to move forward with a short sale, the first thing you will need to do is contact your lender. According to an article in The Balance, getting in touch with the right person can be difficult, and it often makes sense to seek help from a foreclosure defense lawyer immediately so that your lawyer can be in contact with the lender and negotiate the terms of the short sale.
Submit a Hardship Letter and Related Documentation
When you ask the lender to agree to a short sale and to forgive remaining debt, you will typically need to submit a hardship letter that explains your financial situation and why you are unable to continue making payments on your home loan. Along with a hardship letter, you will usually need to submit financial documentation to the lender, including information about any assets you have and copies of your bank statements.
Listing the House and Entering Into an Agreement
Finally, if the lender agrees to the possibility of a short sale, the house can be listed, you can submit a purchase agreement to the lender once you find a buyer, and the lender can approve the terms of the short sale.
Contact an Oak Park Foreclosure Defense Attorney Today
If you have questions about doing a short sale, one of our foreclosure defense attorneys in Oak Park can assist you. Contact the Emerson Law Firm to get started.
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