No. A common misconception amongst homeowners is that their home could be saved through a short sale.
An accurate understanding of the true meaning of a short sale is necessary to dispel such misbeliefs.
A short sale is when a homeowner’s lender/servicer agrees to the sale of a homeowner’s property to a third-party in an amount that is less than what is owed on the mortgage.
In short, the homeowner’s lender/servicer agrees to the sale of their property to a third-party at a significantly discounted amount. In determining whether to permit a homeowner to conduct a short sale, the lender/servicer considers a number of factors including:
- the hardship of the homeowner;
- the homeowner’s ability to pay his mortgage;
- the homeowner’s ability to modify or refinance his home;
- the market value of the property;
- if the amount owed exceeds the value of the property; and
- the costs associated with litigating the foreclosure action.
If the lender approves a short sale, a homeowner’s unpaid portion of the mortgage is canceled, and the debt obligation owed to the lender/servicer by the homeowner is satisfied. A short sale terminates the homeowner’s foreclosure action, reduces their overall debt and prevents the derogatory entry of a foreclosure sale on the homeowner’s credit report.
A short sale benefits a third-party purchaser by enabling him to acquire a property, typically, well below market value that could generate rental income and/or be conveyed afterwards for a significant profit. However, the homeowner’s inability to benefit from the proceeds of a short sale, and potential tax liability regarding their cancelation of debt necessitates counsel with an experienced attorney to determine whether a short sale is a homeowner’s best option.
Our office zealously fights on behalf of homeowners and guides them through all stages of the maze-like foreclosure process. For representation by an aggressive and knowledgeable New York Foreclosure Attorney, contact attorney Bruce Richardson for immediate assistance with saving your home.