Questions?
With no end in sight to the problems with the sub-prime mortgages, real estate owners are facing foreclosure and the damage that it does to their credit. As a last resort, sometimes a homeowner can negotiate with their bank or mortgage company to do a “Short Sale”. This is when in lieu of complete foreclosure, your lender will let you try and sell the home for less than what you owe. They may or may not excuse the balance left after the sale.

This kind of sale can benefit both the buyer, the bank, and the seller. Though their credit is probably already damaged, late payments are not as crippling as a foreclosure, charge-off, or bankruptcy on a credit rating. If, and only if, the lender will agree not to report this as adverse to the credit bureau, it can be a great option to direct foreclosure proceedings.

The bank is neither obligated to agree to the short sale, nor to help your credit rating, so try all other options before you set out to short sale your home. A rate freeze might be preferable, and could allow you to keep your home until prices rise again or a buyer offers you enough to clear your obligation.

If the foreclosures are prolific in your neighborhood and the homes around you are losing equity quickly, the bank could be more agreeable to the short sale and your request to help save your credit. When this is the case, it’s imperative that you move quickly, as every passing day affects the price you can ask, and the deficiency balance that will be left.

Tax Changes in 2008
One good thing this year, the IRS has changed the rules and will not treat any forgiven part of the mortgage as income. The Mortgage Forgiveness Debt Relief Act is part of the government’s effort to help the beleagured homeowners.

Contact us to learn about buying homes in short sale, foreclosures in Myrtle Beach, or condos and homes in Myrtle Beach. We also service Pawleys Island, Little River, and Conway real estate.

This entry was posted on Thursday, April 10th, 2008 at 11:21 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.