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Why Mortgage Companies Consider Short sales
Michael Goldstein, Esq.
Goldstein and Clegg LLC
A short sale, also called a distress sale, is when the homeowner's property has been devalued below the mortgage leaving a shortage between the current market value of the property and the present mortgage on the property held by the lender. Homeowners owe the difference between the mortgage balance and the discounted amount as a result of the short sale, which is referred to as the debt shortage.A short sale would generally benefit the lender because the lender avoids the expenses and hassle of seizing a delinquent customer's property. In addition, lenders realize that they could lose money if the borrower's home is auctioned in a foreclosure proceeding.
To decide whether or not to do a short sale, lenders look at various factors. Those factors are:
- Whether the seller is deserving of a break.
- Whether it would be cheaper to simply repossess and sell.
- How many other properties the lender has in default.
- Whether there are cosigners on the mortgage who can be held responsible for the balance covered on the mortgage.
The foregoing article on short sales was drafted by the Law Office of Goldstein and Clegg, LLC, a Massachusetts Debt Relief Agency
Article submitted Saturday, August 30, 2008
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