Determine If Your House is Eligible for a Short Sale in Monmouth County, NJ

The economic crash of the last few years wreaked havoc on the real estate markets in Monmouth County NJ and beyond. If you have trouble paying your bills, including your mortgage(s) and real estate loans, you are not alone.

The foreclosure rate in New Jersey has reached all-time highs. More and more people, like you, worry about losing their real estate to foreclosure. An NJ short sale attorney can explain the short sale process to you and possibly save your home.

When is a Short Sale Worth Considering?

  • You are concerned about facing a deficiency judgment
  • You want to avoid impact on your credit rating
  • You want to explore options other than bankruptcy
  • The amount of the mortgages and liens on your home are more than the value of the home

How Does the Short Sale Process Work?

A short sale allows you to sell your home at a price less than your current mortgages and loans. A successful short sale will leave the home buyer with a clear title. In some cases, the lenders may agree not to report the shortage – saving your credit rating.

All of your lenders must approve the sale because it means they will be accepting less that the total amount due. Of course, not all lenders will be willing to take the loss and may want to proceed with foreclosure. Lenders will want to see proof of hardship such as medical problems, family issues or loss of income.

It’s a good idea to speak with a knowledgeable NJ short sale attorney at Garland & Mason, L.L.C. who can determine if your house is eligible for a short sale, explain all your options, and negotiate with your lenders on your behalf.

All lenders must approve the short sale. If even one mortgage holder or lien holder refuses to sign, the short sale cannot go through. The lenders to consider are the primary mortgage holder, later mortgage holders, lienholders, homeowner associations and mortgage insurance companies.

What are the Advantages of a Short Sale for the Homeowner?

Look at it this way: if you are a homeowner and you are behind on your mortgage payments because you do not have the money to pay your debts, interest and late fees will continue to accrue. Your debt will increase and your credit will be seriously damaged.

It may be to your advantage to try to sell the home now, rather than keep on paying minimal payments or no payments at all and racking up high interest rates and fees. This is especially true if a foreclosure action is the likely alternative.

According to the national real estate statistics, there have been 2.2 million short sales nationwide in the past few years because of the mortgage crisis. The main reasons people try to get approval for a short sale are:

  • Creditors might be persuaded to forgive the balance of the loan.
  • It might be slightly better for credit scores because it shows a willingness to cooperate with the lender.
  • It is better than having a foreclosure on your record.
  • It takes less time than a foreclosure.
  • You may be able to get a mortgage for a new home sooner than if the property is foreclosed.
  • From an emotional perspective, since you are taking action to solve your financial problems, a short sale may feel more dignified than a foreclosure.

Are There Any Disadvantages of a Short Sale?

There are definitely some potential downsides for a homeowner if they go through the short sale process. such as:

  • The debtor needs to arrange for a buyer.
  • The debtor needs to prepare a short sell package that includes many documents and an explanation of why the situation is a hardship.
  • While creditors release the debt so the sale can go through, they may retain the right to seek a deficiency judgment.
  • If the creditors agree not to seek a deficiency judgment (for the amount the debtor is short), there may be tax consequences. The debtor may have to report the amount forgiven by the creditor to the federal and New Jersey taxing authorities.

It is also important to note that going through the short sale process does not necessarily guarantee that your credit will not be affected negatively, nor does it mean you will be able to easily get another mortgage. This is why speaking to an experienced NJ short sale attorney is extremely important. You need to make the best decision possible for yourself and your family.

Short Sale and Foreclosure Alternatives in Bankruptcy

In addition to short sales, homeowners who find themselves in financial trouble may want to consider filing for bankruptcy. Chapter 13 bankruptcy may let you keep the house by paying the arrears over time. Chapter 13 may also let you strip the second mortgages. Chapter 7 bankruptcy will discharge all your debts including the debts that are more than the value of the property.

Garland & Mason, L.L.C. Can Guide You through the Short Sale Process

If you want to stop foreclosure, selling your house through a short sale may be the answer. Our experienced short sale attorneys can help by:

  • Discuss how to avoid foreclosure
  • Explaining what a short sale is, evaluating your options and prepare all the necessary documents
  • Working directly with your lenders
  • Working with local real estate brokers and appraiser to determine how quickly your home can sell and what its value is
  • Preparing an estimated closing cost statement – sales prices, commissions, taxes, loan balances and other details to figure how much you are really short.
  • Analyzing who all the creditors are
  • Showing that you have a hardship
  • Explaining your options to you and help you choose the best one

Contact Garland & Mason, L.L.C. today for a free, initial consultation by calling (732) 358-2028 or contact us online. Meet with an experienced NJ short sale attorney who can offer foreclosure help and get you a fresh financial start. Our office is handicapped-accessible and is conveniently located just 15 minutes from the New Jersey Turnpike and the Garden State Parkway. Parking is free.