What Are Short Sales & Foreclosure ?

·          STAGE 1: ( ESTABLISHMENT OF DEBT )

·          STAGE 2: ( PUBLIC SALE OF PROPERTY )      

·          STAGE 3: ( DEFICIENCY JUDGMENT )

STAGE 1: (ESTABLISHMENT OF DEBT)

·         LAWSUIT INITIATED & SUMMONS SERVED

·         DEFENDANT HAS OPPORTUNITY TO DEFEND LAWSUIT, AMOUNT OF DEBT, ECT.

·         JUDGE ULTIMATELY RULES ON AMOUNT OD DEBT (IF ANY) OWED TO PLAINTIFF AND SETS DATE OF SALE

STAGE 2: (PUBLIC SALE)

·         ON DATE SET BY THE JUDGE, PROPERTY IS AUCTIONED OFF TO HIGHEST BIDDER ON COURT HOUSE STEPS

·         SOME COURTS NOW CONDUCTING PUBLIC AUCTION ONLINE ( E.G. WALTON COUNTY )

STAGE 3: (DEFICIENCY JUDGMENT)

·         AFTER SALE DATE, LENDER MAY ASK JUDGE TO ENTER S DEFICIENCY JUDGMENT.

·         DEFICIENCY JUDGMENT IS AN EQUITABLE REMEDY ( I.E.  WHAT IS FAIR), AND NOT AN ABSOLUTE RIGHT OF LENDER

·         DEFICIENCY = AMOUNT OF JUDGMENT  ( STAGE 1 ) SUBTRACT  FAIR MARKET VALUE OF PROPERTY ON SALE DATE

HOW LONG DO I HAVE? (THE FASTEST)

·         SERVED ABOUT 60 DAYS AFTER STOP PAYING

·         ONCE SERVED HAVE 20 DAYS TO RESPOND

·         IF NO ANSWER OR DEFENSES, PLAINTIFF CAN MOVE FOR SUMMARY JUDGMENT ON 21^ST DAY

·         HEARING ON SUMMARY JUDGMENT MOTION MUST BE AT LEAST 20 DAYS AFTER FILING OF MOTION

·         SALE IS SET NO SOONER THAT 20 DAYS AFTER HEARING

·         CERTIFICATE OF TITLE IS ISSUED 10 DAYS AFTER SALE

·         TOTAL NUMBER OF DAYS  = 131

SHORT SALES: WHAT IS IT?

·         DEFINITION:  AN AGREEMENT BY A MORTGAGEE (LENDER) TO RELEASE A PROPERTY FROM THE ENCUMBRANCE OF A MORTGAGE FOR LESS THAN THE FULL PAYOFF AMOUNT.

“DOES NOT GIVE FORGIVENESS OF DEBT”  BANK HAS UP TO 5 YEARS TO SUE YOU FOR THE REMAINDER AMOUNT".

WHAT ARE THE BENEFITS?

·         REDUCS THE AMOUNT OF MONEY OWED TO A LENDER

·         LESS DETRIMENTAL TO CREDIT THAN FORECLOSURE

·         POSSIBLE FORGIVENESS OF DIFFERENCE BETWEEN SHORT  SALE PRICE AND AMOUNT OWED TO MORTGAGEE

WHAT ARE THE DRAWBACKS?

·         POSSIBLE TAX LIABILITY FOR AMOUNT OF DEBT FORGIVENESS

·         REQUIRES YOU TO DO ALL THE WORK TO SELL THE PROPERTY

·         DOESN’T NECESSARILY FIX YOUR PROBLEM (I.E. POSSIBLY NO FORGIVENESS OF DEFICIENCY)

DEED IN LIEU OF FORECLOSURE

DEED IN LIEU OF FORECLOSURE: WHAT IS IT?

OWNER VOLUNTARILY DEEDS THE PROPERTY OVER TO THE MORTGAGEE (LENDER) IN SATISFACTION OF THE OUTSTANDING DEBT.

WHAT ARE THE BENEFITS?

·         TYPICALLY ELIMINATES THE BALANCE OF THE LOAN

·         LESS DETRIMENTAL TO CREDIT THAN FORECLOSURE

·         NO LONGER HAVE TO HOLD, MAINTAIN OR INSURE THE PROPERTY ONCE TRANSFERRED TO LENDER

WHAT ARE THE DRAWBACKS?

·         DETRIMENTAL TO CREDIT

·         POSSIBLE TAX CONSEQUENCES

·         CAN’T DO IF THERE IS A SECOND MORTGAGE OR EQUITY LINE

                                                                 BORROWER VS. LENDER                                                        

                 TYPICAL BORROWER ORDER                           TYPICAL LENDER ORDER

·         DEED IN LIEU (W/O DEFICIENCY)               ·         MAKE YOUR MORTGAGE PAYMENT

·         SHORT SALE (W/O DEFICIENCY)                ·         MODIFY MORTGAGE

·         MODIFY MORTGAGE                                  ·         SHORT SALE (W/O DEFICIENCY)

·         DEED IN LIEU (W/ DEFICIENCY)                  ·         SHORT SALE (W/ DEFICIENCY)

·         SHORT SALE (W/ DEFICIENCY)                   ·         DEED IN LIEU (W/O DEFICIENCY)       

·         FORECLOSURE                                             ·         DEED IN LIEU (W/ DEFICIENCY)

·         BANKRUPTCY                                              ·         FORECLOSURE                           

                                                                            ·         BANKRUPTCY