If you’re facing foreclosure and are looking for a foreclosure defense, you might consider selling your home in a short sale. A short sale is when you sell your home for less than the mortgage is worth. It’s called a short sale because after the sale goes through the bank comes up short on its loan. According to the Palm Beach Post, a short sale is a significantly better option than foreclosure.
In Florida, the loss of a home in foreclosure is called a “deficiency judgement.” This mean you still owe the bank the remainder of your mortgage even after your home is foreclosed on. Banks can garnish the wages of borrowers for up to 20 years after the foreclosure.
However with a short sale, the bank agrees to take less money for the home than what is owed in the mortgage. In 90 percent of short sales, the bank waives “its right to seek a deficiency.” If this happens, the bank allows you to sell the house for less than its worth, and you can walk away owing them nothing.
Moreover if the bank decides not to waive its right for a deficiency, it has to go to court and seek a judgement. In a foreclosure, a deficiency judgement is automatically awarded to the bank at the end of the process.
Basically, you want to avoid a deficiency judgement at all costs. Unless you pay off the deficiency, your credit rating will take a hit. It could be 20 years before it’s repaired enough for you to qualify for another mortgage.
If you’d like to learn more about short sales or other foreclosure defense services, contact us. Depending on your specific situation, we will determine the best foreclosure defense options for you.
