The best way to ensure that you are able to negotiate a short sale arrangement that protects your legal and financial interests is to work with an experienced Florida foreclosure defense lawyer. At the Law Offices of Evan M. Rosen, we provide comprehensive and dedicated legal representation to clients who are facing mortgage trouble and need to sell their homes. Short sales are just one of many avenues we can help you to explore. In every case, we will put your interests and needs first.
We will review your financial situation, help you to formulate a plan of attack for resolving your mortgage problems and fight vigorously to protect your rights and create leverage to increase the odds of resolving your situation with favorable terms. You are welcome to read more about short sales below or you can contact us now for a consultation by calling 855-55-ROSEN or by filling out our online form.
A short sale happens when a home is sold for less than the full balance owed on the mortgage. Normally, when a home is sold, the mortgage lender is repaid in full on closing day from the proceeds of the sale. If a house sells for less than what is owed, the borrower would have to bring cash to the table to close the deal and pay off the lender. Unfortunately, many borrowers do not have the extra cash. And the ones that do, often need it for other personal or financial goals. A short sale provides a solution.
Some lenders have programs in place to facilitate short sales, and short sales have become far more common and standardized. However, while there are standard rules in place for short sales.
It is important for the homeowner to make sure certain protections are included in the short sale agreement. Homeowners may also wish to explore their eligibility for cash incentive. There have been various news stories regarding homeowners who have received as much as $40,000 to consummate a short sale.
At the Law Offices of Evan M. Rosen, we understand what terms must be in a short sale agreement to provide necessary protections to homeowners. We will work with you and your bank to draft an advantageous short sale agreement that best protects your interests. We can also assist you in finding a real estate agent and closing agent who specializes in short sale arrangements to help make the transaction as smooth as possible. This makes it easier for you to find a buyer, negotiate with a lender, get the deal done and move on with your life.
When negotiating a short sale agreement, there are a few essential issues that the homeowner must address with the lender in order to be protected. These issues include:
- Deficiency judgments – Florida is a recourse state, so mortgage lenders that do not recover enough from a foreclosure sale to fully cover the principal and costs due on the mortgage can pursue legal action to get additional money from homeowners after foreclosure. This is typically done at the end of a foreclosure in an evidentiary hearing on a motion for deficiency judgment or via a separate lawsuit. You do not want to give the bank an opportunity to come after you in court for the difference between the money obtained from the sale of the home and the balance owed, so you should negotiate a waiver of deficiency in which the bank gives up that right. But, there are also tax implications that need to considered in deficiency waivers. We can help you explore all of this.
- Cash to close – Typically, if your home sells for less than the mortgage balance, you would need to pay the difference at closing. We can help negotiate with the bank to get them to agree to your not having to pay anything to close the sale of your home. The bank must agree to accept the resulting payoff based solely on the fair market value, after deducting for standard closing costs and fees, as full satisfaction of the mortgage loan. Under Florida law, the bank then has 60 days to file a satisfaction and release of the mortgage lien in the public records.
- Dismissal of any pending proceedings – If your lender has already originated foreclosure or other legal proceedings against you, you must negotiate for a dismissal with prejudice. If your case is dismissed with prejudice, the bank typically cannot pursue further legal action against you arising out of the mortgage loan.
- Credit reporting – Foreclosure can have a major adverse impact on your credit, and a short sale is a far better option. Whenever possible, you want to negotiate with your lender to report positive information to the credit bureaus.
- Tax issues – When debt is forgiven, banks and servicers traditionally have to send a 1099-C form to the IRS, reporting the unpaid balance as income. This can create a significant tax burden as you may be obligated to pay the IRS tax on the amount of the mortgage balance that was forgiven. You may wish to negotiate with the bank not to issue a 1099-C and/or consult with tax professionals as to how any potential tax liability can be resolved. While we cannot give tax advice, we can certainly steer you in the right direction.
At the Law Offices of Evan M. Rosen, we understand how to negotiate these issues with your bank, and we will assist in ensuring that your short sale agreement contains the protections necessary so you can walk away from the home sale and move on with your life unencumbered. We can also help you explore all possible incentive programs that offer cash to cover moving and other expenses after a short sale.
Short sales have become very common in Florida, but that doesn’t mean they are easy. It helps to have a trusted advocate on your side to take the stress out of the process and to negotiate a fair deal that helps you to transition out of owning your home without suffering financial loss. At the Law offices of Evan M. Rosen, we will work with you on short sales or other mortgage resolution options so you can achieve the best possible solution to your mortgage issues.
Contact us today at 855-55-ROSEN or through our online form to schedule a consultation to learn more.
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