Ever since the mortgage debacle that precipitated the Great Recession a few years ago, homeowners have struggled, often owing more on their homes than they are worth. Combine this with widespread loss of jobs, and a crisis resulted. A technique for avoiding foreclosure for certain homeowners is the short sale. If you believe a short sale may be right for you, speak with an Orange County real estate attorney.
What Is a Short Sale?
In essence, a short sale is the sale of a home for less than the mortgage owed. One may wonder why a mortgage holder would ever agree to such a sale, but consider that the alternative for them may well be foreclosing on the home. This means they receive nothing at all from the property. As your Orange County real estate law firm will tell you, for this reason you generally have to be delinquent by at least a month on your mortgage payments in order to qualify.
Qualifying for a Short Sale
You likely will need to list the property for sale first before pursuing a short sale. When no offer is made for at least the amount owed on the mortgage, a deficiency judgment is rendered, which opens the door to the possibility of a short sale. Your Orange County real estate attorney will need you to provide certain documents in order to seek the short sale. In essence, you need to prove hardship.
It should be kept in mind that the difference between the owed amount and the short sale is exempt from federal taxes, but not California state income tax. Thus, you need to consider the ramifications of a short sale before pursuing it.
Work with an Orange County Real Estate Law Firm
If you need assistance with a short sale or have another real estate need, speak with an Orange County real estate attorney right away. Call Stephen J. Mooney, Attorney at Law, at (949)395-7060.