Typically, but not always, a decision to request a short sale with a lender occurs when the property is in a delinquent status. As it involves a detailed negotiating process the idea will usually be brought up by either an attorney or a Realtor.

The attorney will usually advise to litigate and defend the ensuing foreclosure action.  However,  most defenses that will be raised will usually only serve to delay the inevitable and dreaded foreclosure auction.

Over the life of a contested foreclosure proceeding the homeowner will continue to accrue all the interest, late charges and escrows including those for real estate taxes and insurance.  In the end it is very likely that more will be owed than the value of the property.  If, at the end of the day, the lender obtains a judgment of foreclosure and sells the property at auction the homeowner will be responsible for any deficiency and the lender may obtain a deficiency judgment.

While the homeowner, upon retaining the attorney, receives an immediate psychological benefit of believing that the foreclosure will be handled the fact remains that the long term future detriment, as noted above, may indeed outweigh the present immediate benefits.

The real question is: would it not be better to quickly and finally resolve the delinquent mortgage situation instead of living with it on an ongoing daily basis?  Rarely does anyone discuss the emotional stress placed on the homeowner, homeowner’s family and even extended family.

Not, in any way, to diminish the role that good professionals play in this scenario there are just too many that advocate that they can be successful with the foreclosure action.  This is just a fallacy. Especially here in Long Island, NY. 

Increasingly, the Justices in this locale, different from say 15 years ago, will rarely sign any stay orders on foreclosure auctions no matter what the legitimate defense is. So, the homeowner is asked to pay, up front fees of anywhere between $2,500.00 to $7,500.00 to stop a sale when the likelihood of success is minimal.

Another avenue for resolving a foreclosure proceeding is the filing of a Chapter 13 Petition.  The detriment to filing a Chapter 13 Petition is that it will be a stain on the credit report for many years into the future and more than 90% of all pro se filings are dismissed and so the gains are relatively short lived. The ability to obtain financing will be severely impacted for many years into the future versus selling a property through a Short Sale.

As long as the foreclosure action is pending it impacts the ability to borrow in the future for another home, for an automobile purchase, and for a myriad of other life issues that necessarily require a modicum of decent credit. However, once the proceeding is resolved, without the property being foreclosed upon, (such as, by a sale – be it a short sale or conventional sale) credit can sufficiently be restored within 2 years to be able to purchase another property.

A sale of the property provides the ability to neatly resolve all these issues!  Within the context of a short sale a professional is negotiating with the lender.  It thus opens an avenue of correspondence and communication with that lender.   Most importantly, once approved, all litigation is held in abeyance whether one is or is not defending the case.

For the homeowner filing a Short Sale, through a Realtor, there is no cost.  Moreover, all closing costs, transfer taxes, recording fees, selling attorney fees and brokerage commissions are absorbed by the lender. There is no upfront money that must be paid to a professional. There are no recurring fees. The lender typically will also pay for moving and relocation expenses.

All it requires is for the homeowner to finally realize it is time to make a move in a positive direction and list the property for sale with an experienced and knowledgeable foreclosure and short sale Realtor® who will be able to file the Short Sale with the lender.

The homeowner gets to continue to reside in the premises at no cost; there is no need to vacate the property! Only once the buyer goes through all the steps any buyer would typically go through in a real estate purchase is there a need to consider a time for the homeowner to vacate on their timetable.  As with any other real estate sale the homeowner attends the closing and transfers a deed.  Thus, there is never a foreclosure and none shows on the homeowner’s credit.