Foreclosure Made Easy - Short Sales Aren't Easy
By Julia VakulenkoRepossessed homes across the nation are popping up in places no one would have imagined. Our good neighbor's homes are facing foreclosure. There was a day when communities would have come together to aid those who had lost their jobs. The folks in trouble could sit down and talk with their banker and adjust the payment and come up with a solution. Sadly, that day is not today.
If an offer is made, the bank needs to decide if it is within the range they will accept. If they do accept it, the owners need to find out for sure if their remaining debt will be absolved. Some lenders will do this but others may force the seller to pay their remaining debt by selling off their other assets.The chance of being absolved of debt is very appealing to down-on-their-luck home-owners, considering the alternative is to foreclose. Foreclosures mark ones credit rating for seven years. Sadly, a bad credit rating can stop one from getting another mortgage. Further, some renters and even employers check credit ratings and see them as a sign of trustworthiness and competence. Plus, there's the humiliating process of having one's home on the public auction block. So the impacts of foreclosure are far reaching and can really turn ones life in a negative direction. It should be noted, however, that although a short sale shows up differently on your credit report, it is still there, and can also have a negative impact.Most banks prefer to accept a short sale than to foreclose, as they must pay taxes on every property in their possession. Taking a small cut in the sale of the home may still save them the money and hassle involved in foreclosing. So short sales are a better option, but they can end up taking months longer than conventional home sales.A short sale is a serious thing, and won't be accepted by the lender without proof that the market drop has created a situation wherein the homeowner will absolutely not be able to sell the home for what they owe. Also, a short sale usually can't happen until after the homeowner is in default, or is about to go into default. In the past, no bank would consider it until the owner had missed mortgage payments. However the current economic climate has made lenders realize that it's sometimes better to quit while they're ahead, so to speak, and accept a short sale before they loose too many payments. However, the homeowner will probably be expected to show, in writing, why they are unable to make further payments or pay the remainder of their debt. Suitable reasons include a death or critical illness in the family, divorce, loss of a job or bankruptcy. Homeowners will also need to show the lender that they have little or no assets. Ultimately, it is in the lenders hands whether or not a short sale is accepted.Anne Eliason is a dedicated professional specializing in Phoenix AZ real estate. For information on Scottsdale AZ homes or for help with all your Phoenix Valley relocation needs, visit Anne online at Phoenix-Valley-Real-Estate.comArticle Source: http://EzineArticles.com/?expert=A_Eliason