Short sales and foreclosures – Walking away may not be that easy
Short sales (selling a home for less than its value) and foreclosures, are more common these days, but are not necessarily the right prescription for homeowners facing decreasing property values, especially when the borrower can continue to afford mortgage payments. A recent article, expresses surprise at homeowners facing responsibility for a loan deficiency. This result is the combination of the poor real estate market and lenders’ need to enforce the terms of their original contract.
Simply put, a short sale with a release of title is not enough. A release of any loans owing on the property needs to be negotiated as well or the short sale is little more than a foreclosure in practice. Former property owners whose homes were foreclosed upon even several years prior would be well-advised to carefully review their credit report in order to determine that they still do not owe for such accounts. A qualified real estate attorney in your area should be able to inform you of your liability to pay a loan after short sale and may refer you to a qualified bankruptcy practitioner who can help you possibly discharge or at least work out this debt.
