A short sale can be emotionally devastating for borrowers, but it is the last resort if you are not able to make payments on time. When the lender approves it, that means they are willing to sell the property for less than the remaining balance you have on your mortgage. It’s a way for them to recover damages without involving a lengthy and costly legal battle.
The process is broken down into four parts:
Step 1 – The Pre-Foreclosure Process
This is when the homeowner has fallen behind on the mortgage payments. The homeowner needs to decide which direction they would like to go – do nothing or pursue some sort of loss mitigation options. A short sale, deed-in-lieu, and loan modification are all loss mitigation options. This article will discuss the short sale process.
Step 2 – The Short Sale application
Once the decision has been made to short sale the property, the homeowner now needs to complete some paperwork to get the process rolling. The homeowner should retain a Realtor who is familiar with the short sale process. This process is not the normal sale and having someone that knows what they are talking about helps the process greatly. The homeowner will also need to complete the short sale paperwork from their lender. Many times the lender will allow the application to be submitted without a contract on the home; however you may need to wait until a contract is offered.
Step 3 – The Negotiation
Once a sales contract is obtained, the negotiations with the short sale lender begin. Either the attorney or the Realtor will handle this task. The short sale bank can take up to six months to get through the process. You really should have an attorney who is experienced in the short sale and foreclosure process. The attorney will be able to assist in securing more time to complete the short sale, if necessary.
Step 4 – The Closing
Once the short sale lender provides the approval letter, the closing can be scheduled. The short sale lender usually provides a 45 day window to close – so the buyer will have time to secure their mortgage and get the closing concluded prior to the expiration of the approval letter. Please note that you as the homeowner will not pay the attorney or anyone else to sell your home. The short sale lender will be responsible for paying the parties involved. The only time you might need to pay any money would be for the appearance fee if a lawsuit is filed against you by the lender.
If you are looking for an attorney in Elgin, IL, who specializes in short sales, get in touch with the Jackson Abdalla Law Group today. We can assign a reputable attorney to fight on your behalf and do everything possible to obtain a successful loss mitigation result!