Lenders occasionally require a new obligation in exchange for approving a Florida short sale. This new obligation is typically in the form of a promissory note.
Most promissory notes required after short sales are unsecured debt obligations – not unlike the note you signed for your original home loan but without the mortgage to secure the debt.
If you are considering a short sale, the effect of such an occurrence may not be the most pressing issue. It could be that unemployment, curtailment of income and other market forces have already wreaked havoc on your credit score.
Nonetheless, or if you are considering a short sale for more strategic reasons, it is important to understand that a short sale will affect your credit worthiness.
It is not uncommon for homeowners and real estate professionals to consider a short sale impossible if there is more than one mortgage involved or junior liens (i.e., liens or judgments that affect the title to the property). This is not surprising for a number of reasons but is nonetheless a misconception.
As you may imagine, there are plenty of homeowners who have more than one mortgage on their properties. Perhaps they took out an equity line to pay for a child’s college or bought a property with 80/20 financing.
There are plenty of these situations and you may be in one and wonder rightfully whether or not you can successfully short sell your property on a second mortgage short sale.
This is a very frequent question, and its analysis is a bit complex because “cost” is such a broad term. Later in the eBook, we will look at Promissory Note requirements, cash contributions and association dues as potential “costs” of completing a Naples short sale. For this section, let’s simplify things a bit and look at standard transaction or closing costs and what you should expect to pay (or not pay).
With regard to ordinary closing costs, a short sale should cost you very little. Here’s why. In a short sale, the lender will agree to absorb many of the ordinary closing costs that are customarily the seller’s responsibility. In our experience with Florida short sales, lenders will usually agree to absorb at least the following closing costs:
In a nutshell, the lender’s right to pursue you for the deficiency after a short sale stems from your obligation to the lender under the Note. If you remember, when you took out your home loan (whether to refinance or to purchase), among the hundreds of pages were two very important documents:
If you are reading this you are likely considering or have considered a short sale of real property in Florida. Over the last few years, our title company has orchestrated the closing of over 650 short sales. In the course of our work with sellers, realtors and lenders, we have heard many questions related to Florida short sales. In order to help you prepare for your short sale, I have memorialized the most frequently asked and pressing questions we have received from people just like you who must sell their property but who owe much more than the property is worth.
Well we’ve made it. The girls – my wife Lydia and daughter Emerson – and I left Fort Myers late Tuesday and made it to Jacksonville before packing it in. We started slowly this morning but banked enough time for a quick pit stop in charming Savannah, GA.
We hit Savannah about lunch time. Online and friend reviews took us to Soho South Cafe, which lived up to its billing. Lydia had a Mediterranean grill; Emerson a PB & J; and I the salmon BLT on the recommendation of Liza, our server. The restaurant is an eclectic mix of furniture and art. Its only consistent design element within the warehouse shell is its inconsistency. We were reminded of one of our favorites from Philadelphia – The White Dog Cafe. The lunch crowd was part local – from lawyers talking their first cases before certain testy judges to businessmen – and part tourist. Overall a great spot for our first stop in Savannah.
Savannah is a wonderfully walkable place – quite a welcome reprieve from what we are used to. We strolled from Soho South Cafe to Chippewa Square then snaked through side streets back to the wagon to get back on the road. We were not disappointed when we rolled into Charleston a couple of hours later..
After being told that a Saxon Mortgage short sale was a lost cause, Winged Foot Title persevered and got Freddie Mac to approve the short sale and save it from the brink of foreclosure.
This is just one of the examples of the lengths to which our team will go to get the job done.
How many times have you heard of a bank mortgage short sale story like this?
NOT LEGAL ADVICE: This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure that this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area. This information is not intended as legal advice and may not be used as legal advice. It should not be used to replace the advice of your own legal counsel.
Winged Foot Tite, LLC is not associated with the government, and our [short sale orchestration] service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
