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Short Sales & Loan Workouts |
Due to current economic conditions, many property owners find themselves with real estate worth less than the balance due on their mortgage(s). They don’t understand the legal, tax and credit consequences involving their mortgage responsibilities. At our firm, we specialize in protecting your legal rights, minimizing damage to your credit and limiting adverse tax consequences when trying to sell your property or modify your loan(s).
Short Sales
The agreement by a lender to allow a property owner to sell his or her property for less than owed on their mortgage is called a “short sale.”
The process is very onerous on property owners and involves providing the lender with significant tax and financial information, as well as a properly crafted hardship letter stating the mortgagor’s reason for requesting the short approval.
Our office specializes in negotiating and closing these transactions for property owners. We have handled numerous transactions and have negotiated sales with many lenders throughout the country.
Deed in Lieu
Under certain circumstances, lenders are not willing to approve and accept the short sale offer. In many of those cases, we are able to negotiate transfer of the deed to the property in lieu of a foreclosure proceeding. This so called “deed in lieu of foreclosure” is a deed instrument in which a borrower conveys all interest in a property to the lender to satisfy a loan that is in default and avoid foreclosure proceedings. The principal advantage to this arrangement is that it immediately releases them from most or all of the personal indebtedness associated with the defaulted loan.
Loan Modification
In some cases, the property owner wishes to remain in possession of the property, but can no longer afford loan payments as they may be structured. Given the lengthy and costly process of foreclosure, banks are sometimes willing to modify the loan arrangement, either temporarily (called a “forbearance”) or permanently. In light of the new federal T.A.R.P. legislation (Troubled Asset Relief Program), you may find that lenders are more willing to negotiate a modification as they become inundated with foreclosure situations and requests for short sale approvals.
For answers to basic questions or to arrange a no-cost consultation, please contact our office.
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