Crucial Foreclosure Short Sales Facts You Must Know
One of the most important things in foreclosure short sales that the borrower ought
to know is that the decision to carry out a short sale on a property must be as a result of mutual consent from the two parties involved, i.e. the borrower and the lender or the bank.
Both Lender and Borrower Must Consent
Nobody should consider it as a favour done for them. Rather, it is best to look at it as a measure to minimise losses from a real estate or mortgage transaction that has gone bad.
Another thing that is important especially for the property owner or borrower to know is that, consenting to this kind of business transaction may badly affect their credit report. This can be fixed but it is usually not that easy. It is also likely to affect future attempts to get a facility for a property one may want to purchase. However, with dedication and commitment, one can get a good credit rating again in a few years.
The Borrower may Still Pay the Remaining Balance
In addition, a borrower that may be involved in foreclosure short sales may still be made to pay the remaining balance between the amount of money they owe in mortgage payments and the amount of money for which the property would eventually be sold for. Some banks do this to avoid losing completely on a business transaction. This does not always happen this way, but it depends to a large extent on the relationship between the parties involved and how the negotiations were done between them.
Furthermore, a borrower ought to know that the process of carrying out or getting an approval for foreclosure short sales may become unnecessarily prolonged. This is because it may be difficult to get a superior officer to approve and it may also be as a result of inexperience on the part of the officer handling it. Some banks now have specialised departments to take care of issues like this.
The borrower ought to know all the processes involved and should have some alternative plans in case their bid for a short sale is rejected by the bank or the lender.