Sometimes Florida homeowners find themselves in a situation where they can’t afford to repay their mortgage. But on top of that, the household has deteriorated, or the surrounding area housing market has gone down, devaluing the property. When a home depreciates below the lien, the lienholder no longer has adequate collateral to cover the loan.
Instead of foreclosing on the property, the lender allows a “distressed” sale or a short sale in Florida to settle the lien forgiving the remainder of the balance. The loan provider recognizes it will not be able to recover the funds entirely but prefers to avoid the red tape associated with a foreclosure.
A short sale can be bittersweet for the seller, considering they have the chance to salvage their credit.
That’s often because an agency will either help them sell the property or even pay cash to the owner for the house to help them get out from under the lien, allowing them to move forward.
This way, the homeowner can potentially get a “paid in full” stamp on their credit report instead of a foreclosure. Let’s look more closely at the short sale process to see if it’s an option you should look at.
Should You Consider The Option Of A Short Sale
Many variables go into whether you should consider selling your Florida home in a short sale. If you’ve been struggling to afford your mortgage repayments, plus the neighborhood housing prices have gone down, the options will likely be limited.
Fortunately, there are reputed agencies in the Florida area willing to help you through the short sale process and even some willing to pay cash for your home, allowing you to hopefully salvage your credit in the process.
Some lenders will be willing to stamp the loan “paid in full” as long as they get a majority of their funds back and if they can avoid the foreclosure process. Learn about the short sale process at https://www.investopedia.com/terms/r/real-estate-short-sale.asp.
The priority is working with an agency with exceptional experience in the short sale process. It usually takes specific training and a proven track record to navigate seamlessly. What will you need to ensure it flows well? Let’s learn.
● A letter to the lender indicating hardship is a priority
The lender will anticipate an explanation as to why you’re unable to continue with repayments on the mortgage. The letter should be explicit and concise, with no excuses or personal stories.
Someone who could afford the mortgage if you weren’t a compulsive shopper would have a less-than-effective letter. An individual with a job loss or significant health concerns and subsequent medical expenses would be much more compelling.
● The loan provider will need to see documentation showing income proof and owned assets
The lienholder will not likely allow a loan to go to a short sale if you have a significant retirement account. The provider will assess your assets, look at your income statements, and two years’ worth of banking history and tax returns.
If these details don’t coincide with what was on the original loan paperwork, it’s not likely the lending agency will allow the deal.
● A CMA or Comparative market analysis should be provided
An agency working with you can assist with providing a comparative market analysis or CMA, which details comparable property values to help assess the possible house value for the one you need to sell.
If it’s found that there is significant depreciation with minimal chance of recovering to a price point capable of paying the loan amount in full, the lender will listen to your case. The comparatives should be recent, within a six-month timeframe. Go here for guidelines to follow on short sales.
Final Thought
No one wants to lose their home under any conditions, least of all a foreclosure. Unfortunately, situations arise where through either the housing market deteriorating or life circumstances, it’s no longer feasible to continue paying on the property, and somehow you need to get out from under the lien.
One of the most straightforward, albeit complex, scenarios is through a short sale. Fortunately, reputed agencies in the Florida area specialize in the process and have proven successful in navigating the intricacies.
These professionals will help with the sale or pay cash for the house; either way, you can move forward.
About The Author
Michelle Joe
Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs. You can find her on twitter
