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.