Florida is undeniable the number one State when it comes to foreclosures in the United States. That is one fact Florida is trying very hard to relinquish. On the other hand, there are several reports cropping up that the housing market is improving and we’re approaching a stabilized market. This stability is extraordinarily fragile any slight turn in the economy may change the market improvement for foreclosures and short sales in Florida. Let’s explore further into what a Short Sale is, and if it’s a good move in these economic times.
A short sale is a sale of the mortgaged property which the selling price of the property will not cover the balance of the debt of the mortgaged property. Usually, the property is said to be “underwater”. A property that is said to be underwater is when the mortgaged property’s loan is higher than the fair market value of the mortgaged property. If you are in this situation, a short sale is usually an option. A short sale must be negotiated between you and your bank. This is where an experienced lawyer will be handy. Only when an agreement is reached a short sale can proceed. The unpaid debt due to the shortfall from the sale is known as a deficiency. Depending on the agreement that was negotiated, you may have to still pay the deficiency to the bank. Again an experienced attorney will assist you to an amicable agreement with your lender.
However, due to recent laws that have expired and the recovering economy short sales have been on the decline. Back in late 2007 when the housing market collapse affects were taking hold congress passed the Mortgage Forgiveness Debt Relieve Act. This act allowed homeowners the ability to not claim forgiven debt as income on the following year’s tax return. This of course, potentially saved the homeowner many thousands of dollars in forgiven debt through a short sale negotiation. This law expired at the end of 2013 and was not renewed. Home prices are on the rise, so fewer homes are “underwater” as explained above. This means that sometimes banks are less willing to accept offers from homeowners. You may need someone experienced to explain your case. Also, since home prices are recovering banks have been said to be expecting too much for properties and short sales.
If you need help navigating a possibility of a short sale you need someone who is experienced and wants to help you. The bank only is thinking in terms of dollars and cents. We want to help you so they work with a human rather than an Excel worksheet. Remember to live life and leave the legal stuff to us!
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