Struggling to pay your mortgage and realizing that you could soon be facing foreclosure is an extremely difficult experience for any homeowner. Indeed, it can be devastating to recognize that you do not have options for staying in your home given the amount of debt you owe. There are a variety of options that could be available to you to avoid foreclosure, including a short sale. Our Oak Park foreclosure defense attorneys routinely help struggling homeowners with short sales in order to stop a foreclosure from happening, and we can provide you with more information about how a short sale might benefit you. In the meantime, the following are the top five advantages of a short sale.
1. Avoid Having a Foreclosure on Your Credit
One of the most obvious advantages of doing a short sale instead of foreclosure is that you will not have a foreclosure on your credit record or credit report. When a foreclosure happens, a consumer’s credit takes a significant hit, and it can be difficult to rebuild credit. While a short sale will still affect your credit, it will affect your credit significantly less.
2. You Will Have Greater Control Over the Process Than You Would in a Foreclosure
When you do a short sale, you will be able to have more control over the process and will be able to make plans to sell the home and to move into a new one.
3. You Can be Eligible for Another Mortgage Sooner
When a judicial foreclosure occurs, you may need to wait for up to eight years before you are eligible to get a mortgage. With a short sale, you can be eligible for a mortgage again on a much shorter timeline. Depending upon the type of loan you want to get, you may need to wait anywhere from two to four years before you are eligible again, according to Bankrate. That timeline is significantly shorter than if you lose your home to foreclosure.
4. You May Save Money
The costs associated with foreclosure can be high. According to Mortgage News Daily, the Joint Economic Committee of Congress estimates that the average cost of foreclosure to a homeowner is more than $7,000, while a short sale will incur minimal costs.
5. Less Stressful Than a Foreclosure
Given that you will have more control in a short sale than a foreclosure, and that you can begin rebuilding your credit in order to be eligible again relatively soon for a mortgage, a short sale is generally less stressful for the homeowner than a foreclosure.
Contact an Oak Park Foreclosure Defense Lawyer Today
If you are behind on mortgage payments and you are facing the possibility of foreclosure, you should get in touch with an Oak Park foreclosure defense attorney who can provide you with more information about your options. We can help you through the short sale process, which can be complicated, and we can also provide you with information about other foreclosure defense options, such as a deed in lieu of foreclosure. Contact the Emerson Law Firm to learn more about how we can assist you.
See Related Blog Posts:
Does Bankruptcy Always Stop Foreclosure?
How Can I Do a Short Sale?
Showing posts with label oak park illinois short sale help. Show all posts
Showing posts with label oak park illinois short sale help. Show all posts
Wednesday, July 13, 2022
Wednesday, September 15, 2021
Short Sale or Chapter 7 Bankruptcy?
If you are facing foreclosure, you may be looking at options to avoid foreclosure such as a short sale or a deed in lieu of foreclosure, but you also might be thinking about filing for Chapter 7 bankruptcy. Which option is the right one for you? In order to reach a definitive decision, it is always a good idea to seek advice from an experienced Oak Park foreclosure defense attorney about your particular situation and the facts surrounding your case. In the meantime, we want to explain some of the issues that might arise when deciding between a short sale or a Chapter 7 bankruptcy filing.
Thinking About Short Sales and Bankruptcy Based on Your Existing Debt
If you are considering the possibility of a short sale or filing for Chapter 7 bankruptcy, it is important to think carefully about the other debt you have currently. Is the majority of your debt associated with your mortgage, or are you also facing a looming amount of consumer debt from medical bills, credit cards, student loans, or other debt sources? If it is the former—that is, if most of your debt is linked to your mortgage—a short sale may be a strong option for avoiding foreclosure while also allowing you to avoid a bankruptcy filing. Yet if you are also struggling with a significant amount of additional debt, some of the limitations associated with a short sale might mean that filing for Chapter 7 bankruptcy will be more beneficial for you.
Short Sales Can Allow You to Avoid Foreclosure but May Come With Debt
What are those limitations of a short sale when it comes to avoiding foreclosure? First, let us emphasize that short sales can be extremely beneficial for consumers who are struggling largely with mortgage debt and are facing foreclosure. To be clear, a short sale is a process through which your mortgage lender can agree to take a payment for less than the amount you owe on your mortgage and release its lien for that lower amount so that the house is not ultimately sold through the foreclosure process. How does this work? The house will be put up for sale as a short sale, and even if it sells for less than the amount you owe on your mortgage, the lender will accept that amount.
However, there are some potential complications. If your mortgage lender will not waive the deficiency amount—the amount of money still owed based on the sales price of the house and your mortgage amount—then you will still owe that money. These deficiencies can range widely in amount, from several thousand dollars to tens of thousands of dollars. Your lawyer can help you to negotiate a waiver from the lender so that you do not owe this money. Yet even if the lender agrees and forgives the remaining amount, you will likely be required to pay taxes on that forgiven amount. While the tax on $5,000 of forgiven debt will not be particularly steep, the tax consequences of having, for example, $100,000 or more of mortgage debt forgiven can be significant.
Learn More From a Foreclosure Defense Lawyer in Oak Park
If you are considering a short sale or bankruptcy, you should seek advice from our Oak Park foreclosure defense attorneys today. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
Five Things to Know About Short Sales
What is a Consent Foreclosure?
Thinking About Short Sales and Bankruptcy Based on Your Existing Debt
If you are considering the possibility of a short sale or filing for Chapter 7 bankruptcy, it is important to think carefully about the other debt you have currently. Is the majority of your debt associated with your mortgage, or are you also facing a looming amount of consumer debt from medical bills, credit cards, student loans, or other debt sources? If it is the former—that is, if most of your debt is linked to your mortgage—a short sale may be a strong option for avoiding foreclosure while also allowing you to avoid a bankruptcy filing. Yet if you are also struggling with a significant amount of additional debt, some of the limitations associated with a short sale might mean that filing for Chapter 7 bankruptcy will be more beneficial for you.
Short Sales Can Allow You to Avoid Foreclosure but May Come With Debt
What are those limitations of a short sale when it comes to avoiding foreclosure? First, let us emphasize that short sales can be extremely beneficial for consumers who are struggling largely with mortgage debt and are facing foreclosure. To be clear, a short sale is a process through which your mortgage lender can agree to take a payment for less than the amount you owe on your mortgage and release its lien for that lower amount so that the house is not ultimately sold through the foreclosure process. How does this work? The house will be put up for sale as a short sale, and even if it sells for less than the amount you owe on your mortgage, the lender will accept that amount.
However, there are some potential complications. If your mortgage lender will not waive the deficiency amount—the amount of money still owed based on the sales price of the house and your mortgage amount—then you will still owe that money. These deficiencies can range widely in amount, from several thousand dollars to tens of thousands of dollars. Your lawyer can help you to negotiate a waiver from the lender so that you do not owe this money. Yet even if the lender agrees and forgives the remaining amount, you will likely be required to pay taxes on that forgiven amount. While the tax on $5,000 of forgiven debt will not be particularly steep, the tax consequences of having, for example, $100,000 or more of mortgage debt forgiven can be significant.
Learn More From a Foreclosure Defense Lawyer in Oak Park
If you are considering a short sale or bankruptcy, you should seek advice from our Oak Park foreclosure defense attorneys today. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
Five Things to Know About Short Sales
What is a Consent Foreclosure?
Thursday, September 6, 2012
Short Sales Popularity Continues to Rise
Pre-foreclosure sales, or short sales, are on the rise according to new
national data released recently by RealtyTrac.
A short sale is also referred to as a pre-foreclosure sale because
it requires a lender’s approval before the seller (homeowner) can sell a house
for less than what the seller owes on the mortgage.
Short Sales – No Sign of Slowing
According to the Chief Executive Officer of RealtyTrac (an online market for distressed property), lenders are approving more competitively priced short sales, which lead to more successful short sale transactions. This may be good news for homeowners looking for a plausible solution to get out of their home without strings attached.
In a recent foreclosure sales report, it states that sales of homes that were in some stage of foreclosure or bank owned accounted for approximately 26% of all US residential sales during the first quarter of the year. This figure is up from the fourth quarter of last year when only 22% of all sales were such, and the first quarter of 2011 when they were 25%. According to the report from RealtyTrac, first quarter pre-foreclosure sales were at their highest level since the first quarter of 2009 and pre-foreclosure sales reached 12% of all sales during the first quarter, up from 10% of all sales in the prior quarter and 9% of all sales in the first quarter of 2011.
Lenders may be working off a large inventory of pre-foreclosure homes, making it more advantageous for a homeowner in distress to contact the banks and work on the short sale process. It’s all part of national trend.
“Lenders are approving more aggressively-priced short sales, which in turn is resulting in more successful short sale transactions,” said notes the CEO of RealtyTrac. Banks are becoming more amenable to short sales as the housing slump drags on through its fifth year, as shown by the statistics. Homeowners are also becoming more familiar with short sales and contacting our area Oak Park real estate lawyers to get assistance with this process, instead of waiting for the sheriff to show up with an order to vacate the property. Another reason why short sales are on the rise is because real estate agents may be getting better at selling them.
Credit Realities with a Short Sale
One of many reasons struggling homeowners pursue a short sale involves the credit benefit. For example, FICO, the credit scoring company, notes someone with a good credit score, say 720, may see it drop to 570 to 590 after a foreclosure. A short sale, without personal recourse against the seller, will drop it to 605 to 625. But a short sale without forgiveness has the same effect as a foreclosure.
Of course, a less serious impact on one’s credit is just one of many reasons that homeowners stand to benefit from these sales. In our area, be sure to get in touch with our Moorestown short sale attorney to learn more.
Short Sales – No Sign of Slowing
According to the Chief Executive Officer of RealtyTrac (an online market for distressed property), lenders are approving more competitively priced short sales, which lead to more successful short sale transactions. This may be good news for homeowners looking for a plausible solution to get out of their home without strings attached.
In a recent foreclosure sales report, it states that sales of homes that were in some stage of foreclosure or bank owned accounted for approximately 26% of all US residential sales during the first quarter of the year. This figure is up from the fourth quarter of last year when only 22% of all sales were such, and the first quarter of 2011 when they were 25%. According to the report from RealtyTrac, first quarter pre-foreclosure sales were at their highest level since the first quarter of 2009 and pre-foreclosure sales reached 12% of all sales during the first quarter, up from 10% of all sales in the prior quarter and 9% of all sales in the first quarter of 2011.
Lenders may be working off a large inventory of pre-foreclosure homes, making it more advantageous for a homeowner in distress to contact the banks and work on the short sale process. It’s all part of national trend.
“Lenders are approving more aggressively-priced short sales, which in turn is resulting in more successful short sale transactions,” said notes the CEO of RealtyTrac. Banks are becoming more amenable to short sales as the housing slump drags on through its fifth year, as shown by the statistics. Homeowners are also becoming more familiar with short sales and contacting our area Oak Park real estate lawyers to get assistance with this process, instead of waiting for the sheriff to show up with an order to vacate the property. Another reason why short sales are on the rise is because real estate agents may be getting better at selling them.
Credit Realities with a Short Sale
One of many reasons struggling homeowners pursue a short sale involves the credit benefit. For example, FICO, the credit scoring company, notes someone with a good credit score, say 720, may see it drop to 570 to 590 after a foreclosure. A short sale, without personal recourse against the seller, will drop it to 605 to 625. But a short sale without forgiveness has the same effect as a foreclosure.
Of course, a less serious impact on one’s credit is just one of many reasons that homeowners stand to benefit from these sales. In our area, be sure to get in touch with our Moorestown short sale attorney to learn more.
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