Short sales an alternative to foreclosure
April 16th, 2008
A homeowner struggling with mortgage payments feels that short sale is definitely a better option to sell off his home than his home going on foreclosure. Short sale is a medium to sell of the home in which lender agrees to take the home for less than what is owed by the homeowner to eradicate the possibility of auction.
In fact both the lender and homeowner lose money through short sale but this does not ruin the credit status of the homeowner as gets wreck with foreclosure in which the lender sells the property after seizing it usually at an auction that starts with a bid equal to the amount of loan, accrued interest and other fees relating the sale of the house. Around 20 percent of mortgaged homes go for short sale nationwide according to the survey carried out by the newsletter within the Mortgage Finance.
The process of short sale that includes lender-approval process however proves long and frustrating for the individuals who involve with it. The same happened with a couple Christopher, 42, and his wife, Jennifer McMahon, 41, whose process took time from May 2007 to March 2008 to convince Countrywide Mortgage for short sale on their five-acre farmette situated at Glenmoore, Chester County, which they bought for $379,900 in the year 2006.
According to Farah Jiminez, executive director of Mount Airy USA (a community development corporation works for foreclosure counseling), the region in which people do not carry much debt of what their houses actually worth and where the home values have been holding relatively steady, the option to choose between foreclosure or short sale is like picking up a poison for them. Actually both the ways result in loss of house and loss of money by adapting different methods. Jiminez further said that, a foreclosure actually is a slow process that provides more time to the homeowner to recover from what actually happens to his much loved property but actually carries a long years of compromised and poor credit. Whereas a short sale is a mean that forced a homeowner to leave the ownership of his house very soon but if buying a new house is important for that person, this gives an opportunity to the person to visit again in the same house within the period of two years. The people who normally pick up short-sale properties are some first time buyers, and who look for primary residence with the help of local agents. Bruce Witt, a Weichert agent in Fort Washington said that short sale as well as foreclosure has one downside with it that the seller may be liable to federal income tax on the account of difference between the sale price and the loss amount possessed by the lender.
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August 22nd, 2008 at 11:23 am
[...] as they are by unsold houses. They are offering easy loan terms to refinance and even allowing for short sales but all to no avail. Foreclosures continue to hold centre stage. So far the successes have been [...]