The overall housing market in Florida and throughout the country has been in pretty good shape for several years now. As a result, the number of foreclosure actions that are being filed is likely dropping quite a bit. However, for any number of reasons, there are some Florida homeowners who are facing tough times when it comes to making mortgage payments. For those individuals and families, knowing about foreclosure options is crucial.
Many of our readers in Florida have likely heard the term “short sale.” However, unless you have gone through this process, most people have questions about what a short sale is, beyond a basic understanding. In general, homeowners who have missed some mortgage payments will usually be put on notice by their lenders that they need to get up-to-date on payments or risk the potential of a foreclosure action. In a foreclosure action, the lender asserts its legal rights to the home in question, which is used as collateral for the mortgage loan.
A short sale may be an option to avoid that foreclosure action for those who have come to the determination that they simply cannot keep their home, but who do not want to face the detrimental impact of a foreclosure on their credit record. To initiate a short sale, the lender must agree that the proceeds from the sale of the home – for an amount that is less than what is still owed by the borrower – will be enough to discharge the borrower’s obligations under the mortgage agreement. In sum, the lender keeps all the money and the borrower moves out with no funds from the sale, but without the burden of continuing mortgage debt and obligations.
Facing foreclosure is not a pleasant experience. Florida homeowners who might be in this type of situation will likely need to consider all of their legal options, even potentially a short sale.