What is a Short Sale?

What is a short sale pay off?
Imagine your home is worth $200,000, but, your owe $220,000 on it.  If you were to sell it in the open market at $200,000, you might net $184,000, or $36,000 less than what you need to pay off the loan.  A short pay off is where your lender will forgive a portion or all of the short amount and cover the closing costs of the sale including real estate sales commissions.

What lender would just write off that type of money?

Just about all of them will, with justification.  Justification might mean  a substantial loss of income that would prevent you from paying on the mortgage, therefore being forced in a position to sell the home. Examples of hardship include but are not limited to- Job Loss, Serious Health Condition, Ensuing Balloon Payment, a coming adjustable rate reset or some other financial calamity that will stop  you from being able to make your payments.

NEWS! Effective October 1, 2008- US Department of Housing and Urban Affairs "Hope for Homeowners" allows troubled mortgage holders to avoide foreclosure by refinancing into smaller, more affordable FHA back mortgages, provided Federal Government gets a piece of the equity - growth action and provided the lender voluntarily agress to the deal, which includes writing down or reducing loan balances. If you are living in your home and it is your primary residence- you may want to check with your lender to see if you are eligible.  Call Giles Realty Group today and let us help you!