Category: Short Sale Lawyer

A short sale is an arrangement where the proceeds obtained from selling the house are lesser than the amount owed to the mortgage lender. Short sales usually take place when a homeowner is delinquent on their mortgage payments and wants to avoid foreclosure against them. Sale proceeds, which are usually lower than the amount owed, go to the mortgage company and in return, the lender lifts their notice of deficiency, releasing homebuyer from any obligation.

If you find yourself in a difficult financial situation and are looking to initiate a short sale, it can be extremely advantageous for you to procure the services of a seasoned short sale lawyer. Here are 3 key reasons that you should opt for legal counsel rather than merely hiring services of a broker or going DIY.

Access to Legal Advice

Short sales can involve legal aspects and real estate issues, along with different legal documents that need careful consideration from a lawyer. Moreover, you may require legal advice on various questions that arise. Therefore, it can be extremely beneficial to acquire services of an experienced real estate lawyer to guide you throughout the process. Remember, brokers or any individual who does not have a practice license cannot provide a legal advice on any matter related to the short sale transaction.

Better Negotiation

In order to initiate a short sale, you will have to ask your lending institution to release their mortgage lien from the house for proceeds in the sale. Most lenders are looking to obtain full payment without incurring any losses. Hence, using their persuasive skills, a competent real estate lawyer can negotiate on your behalf and get a favorable deal by demonstrating that short sale can expedite the recovery process and can benefit both the parties involved in the transaction.

Waiver of Liability for Deficiency

In many instances, the financial institution asks for a promissory note which states that you will pay the part of the unpaid losses, especially if you have a decent revenue stream or other assets to your name. Having a real estate attorney on your side can provide you an upper hand while negotiating a waiver of the deficiency or at least settle for a lower payment as a lending institution will be aware that you will have a foreclosure defense at your disposal if they do not opt for a short sale.

If you wish to know more about this subject or speak with an experienced real estate attorney, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.

In the United States, 65% of homeowners own a mortgage (debt taken to purchase a real estate property) on their house. When a homeowner is under financial stress and unable to pay the mortgage payment of their house, they are presented with mainly two options: short sale and foreclosure. It is imperative to understand the main differences between both of these processes to make a wise decision.

A short sale is a procedure to sell your home when an owner owes a mortgage of a higher amount than the market value of the house. If banks agree to accept a lesser amount than the figure actually owed by the homeowner, then the homeowner liability towards the lender is settled. On the contrary, foreclosure is a legal process initiated by a lender when a homeowner is unable to make the mortgage payment for a significant time period.

Reasons to choose Short Sale over foreclosure

A short sale is considered a better option compared to foreclosure. Unlike a foreclosure, a short sale allows the home sale to be conducted in a respectful and dignified manner as you are in control of the sale instead of getting evicted from your property by the concerned authorities.

Moreover, a short sale has a far less negative impact on your credit rating when compared to foreclosure. As a matter of fact, people who choose short sale are eligible to purchase another house; however, they may face additional difficulty while securing a new mortgage. Whereas in case of a foreclosure, a person may have to wait 5 years to buy another house.

Furthermore, if you are looking to obtain a loan from a bank, you may not be obligated to report a short sale, but details pertaining to foreclosure must be disclosed in the submission form, which may increase likelihood of your loan application to be denied.

However, according to the law prevailing in Illinois, a homeowner can only opt for short sale option if the lender has agreed to this arrangement, otherwise, a borrower may involuntary have to go towards foreclosure. Thus, it can be highly beneficial to get help from a short sale lawyer to represent your case in front of a lender. A skillful attorney may be in a better position to convince your lender to agree to a short sale arrangement.

How can a short sale lawyer help you?

A short sale lawyer can play a significant role in convincing your lender. Vested by their experience, your advocate can build a compelling case in favor of short sale by demonstrating its potential benefits contrasted to foreclosure. For instance, a short sale will allow the lender to get back their money much sooner than foreclosure process. Your attorney will be able to articulate such benefits in a more persuasive way, which may increase the probability of your lender agreeing to a short sale arrangement. Furthermore, your short sale lawyer would also devise a foreclosure defense, which may incline your lender to choose a short sale arrangement as they may not want to engage in a time consuming and tedious litigious process.

If you want to learn more about this subject or speak with an experienced short sale lawyer, it can be helpful to contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a consultation session.