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Despite changes, short sale transactions still have complexities

Sitting on an underwater home mortgage is certainly something to be concerned about. An unexpected life event, such as a medical emergency or job loss, could even send a financially secure family into distress. This is exactly why so many South Carolina residents have turned to short sales as a viable alternative to foreclosure.

The reality is that no one wants to lose their home or have their personal credit rating severely damaged. Rather, many have turned to the benefits of a short sale, a bank-approved home sale at the current market value that clears mortgage obligations. However, this can be a confusing and lengthy process if the right steps are not taken. Even though the federal government has outlined new short sale rules over the last several months, there are still many complications that can arise.

One woman, who purchased a condo for $250,000 as an investment, was hit hard by the housing market troubles. This past winter, the woman sought to avoid foreclosure and received approval for a short sale at $72,000, and her lender agreed to take $1,000 for the transaction. Not long afterward, the condominium was sold and the payment was sent to the bank.

Unfortunately, the situation became tricky when the lender suddenly rejected specific terms of the short sale deal and returned her money. Despite efforts to appease the bank, the woman's short sale was ultimately rejected, but she already sold her property and the new owner was already living there.

Short sales are certainly an attractive option to clear an underwater mortgage and move past foreclosure, but this does not necessarily mean that the transaction is simple. Gaining financial security is important, which is why it may be beneficial to seek advice and complete a short sale transaction with the confidence that it will be successful.

Fortunately, the woman was eventually able to resolve the short sale issue, and the lender apologized for the inconvenience. With some assistance, the woman found a way over the hurdles and secured a greater sense of financial relief as a result.

Source:

  • Our firm can handle complex short sale transactions. To learn more about your options to avoid foreclosure, please see our Charleston short sales page.

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