Mortgage Pre-Foreclosure/Short Sale Information




·         What is short sale? - A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. It often occurs when a borrower cannot pay the mortgage loan on their property, and the lender decides that selling the property at a moderate loss is better than pressing the borrower who cannot make the payment. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers.


·         How to do short sale? – The short sale process is simple but the techniques involved can be very complicated. The bank or mortgage company agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The homeowner/debtor sells the mortgage property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. A short sale is typically faster and less expensive than a foreclosure but it does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer. Lenders often have a loss mitigation departments that evaluate potential short sale transactions.  The wide array of parties involved in a short sale makes it a relatively complex and highly specialized type of real estate transaction.  Short sale deals can have a high failure rate and often do not close in time to prevent foreclosure if they are not handled by a knowledgeable and experience professionals such as a Realtors who has done short sales and knows the process.


·         Engage the help of a Realtor – Short sales and foreclosures are now the new traditional real estate transaction. Knowing how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities are not merely good skills to have in today's  market - they are critical.  While short sales and foreclosures are not for the faint of hearts, you must choose agents with experience and success in working short sales.  You must ask them for proof of their successful transations in this field.




1)      The Mortgage Forgiveness Debt Relief Act and Debt Cancellation - Government is still working on passing this again hopefully soon.

2)      Florida Statues Regarding Foreclosure of Mortgages