A Short Sale is Better Than a Foreclosure
By Sandy Flores
Special to Excelsior
Foreclosure (foreclosure) and short sales (short sale) are types of procedures with very complex situations. The circumstances giving rise to these types of transfers are delicate and not easy for the owner. However, they are also similar because without knowledge of how they develop you could find yourself in a confusing and complicated territory. Whether you are in the process of foreclosure, if selling your home does not cover your total balance to cancel existing mortgages, you may consider a short sale as one of the best options.
The short sale is one alternative for those borrowers who are eligible under the program Capacity and Stability Pay for Homeowners (HAMP, for its acronym in English), which allows you to keep your property through a modification.
Assistance Programs to Avoid Foreclosure (HAFA for short) offer cash incentives to homeowners and financial servers and investors to encourage short sales and enable families and avoid the process servers execution is very expensive and minimize the negative impact of foreclosures on borrowers, financial institutions and communities. Short sales are transactions made with careful coordination and close cooperation between a number of parts: servers, appraisers, borrowers, buyers, Realtor’s, title agencies and often mortgage insurance and mortgage holders seconds lines of credit or home equity loans.
A short sale provides a better outcome for borrowers, investors and communities. These alternative programs to avoid foreclosure simplify and streamline the short sale process providing procedures, deadlines and standard documentation. Also, selling your short sale property gives you some control with self-tracking sale. You stay in the property even if the payments were not made until the property has been transferred through the short sale.
You can meet the new owners on better terms and may be eligible under the rules of Fannie Mae, to purchase another house within a period of approximately two years instead of five to seven years if your credit report does not reflect “repossession”. If your bank approves the short sale, it has the right to issue a 1099 for the difference, due to a provision in the IRS code about debt forgiveness. But if you qualify for Tax Relief Department of Revenue, could exclude the payment of these taxes under the law of the Mortgage Forgiveness Debt.
Foreclosure, on the other hand, is that the bank has the right to take legal action to recover the property offered as security for a loan, and whose payments have not been made, resulting in the breach of contract was initially made when acquired the property. The bank will continue waiting for restitution payments due and take appropriate action to request that such payments are made and who makes up with the repayments. Now, if at the end of three months has not cured the restoration of such payments, then the bank will start the foreclosure process foreclosure or execution. After the foreclosure process begins with the registration of the “Notice of Default” or known in English as “Notice of Default”, that your bank sends you, you will be informed no less than 90 days approximately the date your property could be auctioned to the highest bidder.
All types of performance require that these notices are published to all stakeholders to be notified as to the measures. Once the property is sold by public auction, families have a very short time to find a new place to live and move out before the sheriff publish eviction.
Among other options, homeowners who are in foreclosure have the right to rescind (cancel) a transaction within five days before the auction. The banks must notify the seller of this right, including a copy of the form will allow sellers cancel. Time goes so fast! Take immediate action if you are going through this situation. Not only have less time to take action, but also less possibilities and solutions to work with them and avoid repossession of your property. As always, it is advisable to seek advice from a professional to determine and make a more informed decision and advantageous for you.