Should I "short sell" my home or let the mortgage company foreclose? A short sale is virtually the sale of your home for less than the money you owe the mortgage company. You need the approval of the mortgage company in order to make a short sale. Generally, the mortgage company will not approve a short sale unless the sale provides an advantage to the mortgage company. One advantage would be that a short sale will net the mortgage money more cash than if they were to foreclose and resale the home. I do not recommend you make a short sale unless you gain some advantage. If the mortgage company is willing to write off and forgive the unpaid balance of the mortgage, it may be desirable to short sell. However, if the mortgage company wants you to sign a note and pay off the unpaid balance or any portion of the unpaid balance, you should think twice and three times. If you could not pay your mortgage payments before, what makes you think you can pay rent or a mortgage plus an additional payment on the unpaid balance of the previous mortgage? Remember, any transaction involving the sale of your home for less than the full pay off will be reported to the credit reporting agencies and will have a negative affect on your credit score. What if you have a second mortgage on your home?
A short sale is not practical if there is a second mortgage on the home. Generally, the second mortgage holder will not release its security deed unless it receives some money. If the first mortgage holder agrees to pay the second mortgage holder some money and the second mortgage holder to release its lien in exchange, that does not necessarily mean you no longer owe the second mortgage holder any money. You will still owe the second mortgage holder on the note. The lending institution will more than likely sue you on the note now that their loan is unsecured.
Occasionally, a mortgage company will offer to pay you some moving money in exchange for a "quit claim deed". You need to weight this option seriously and bargain that the mortgage company will not report a negative on you credit report.
If you are contemplating bankruptcy, a short sale generally will not be of any advantage to you. What is the sense in going through the hassle surrounding a short sale and then filing bankruptcy. My advice is to consult with a bankruptcy attorney before making a short sale if bankruptcy is in your future.
For information concerning other aspects of selling your house click on "selling my house in bankruptcy".
Bankruptcy Lawyers, 390 W Crogan St, Ste 300, Lawrenceville, Georgia 30046.
