Friday, March 23, 2012

Short sale vs just walking away

Much has been written about short sales, foreclosures, strategic defaults, deed-in-lieu and other forms of getting out from under an underwater property. I'm often asked why a distressed property owner should attempt a difficult short sale when they could just stay in the property rent free until the bank finally forecloses, years in some cases. Short answer; the deficiency (the amount of loss the bank incurs) does not go away in the case of foreclosure. The bank can come after the borrowers for up to 25 years in Florida after the foreclosure. The deficiency accrues interest in the interim. The bank has five years to file the deficiency action and then has 20 years to pursue the debt even if the borrower moves to another state. They may be able to garnish wages, attach bank accounts and even seize property. Good article on the subject here.

In a short sale, there is the chance of either being released from the deficiency outright or replacing the original promissory note secured by the property with an unsecured and likely smaller note. Here's a link to a very detailed explanation  of the differences in foreclosures, short sales and deeds-in-lieu from Florida real estate attorney, Richard Zaretsky. Many thanks to him for taking the time to share his knowledge and experience.

If you're in a situation where you can't or don't want to continue making your payments, don't just sit there waiting for the bank to knock on the door. The consequences of inaction could haunt you for a very long time.
 
Andy- Aunt Bee wants to see new models; she's thinking of trading in her old car.
Goober- That's a good thing - that car is on its last leg.
Andy- You said it was in tip-top shape.
Goober- That's before I knew she was going to trade it in.
Posted by at

1 comment:

  1. SnowmanMarch 27, 2012 9:35 AM

    Being retired and able to travel the question of what does one do with mans best friend "the dog"while away.The dilemma starts with where and at what expense one will pay to harbor ones pet.We have found a wonderful enterprise called Camp Bow Wow.Your pet is out and about with other dogs similar in size.Temperament must be earned through a thorough evaluation of the pet.Any aggressiveness and your pet flunks.Find a different means.A service such as supplied by this type of business is assuring but expensive for any stay longer than a couple weeks.So what is one to do. My question is how does one go about finding a property for rent that will accommodate a pet.Size always seems to come into play--I've stated this in a past post--other obstacles are prevalent.A first floor unit with a proper area to allow--you know what--would be the normal concern.a townhouse or small single with a fenced in area would be perfect---BUT---I have checked listings to no avail. Could a listing exist for pet owners such as ourselves. We would love to spend the entire winter with warm weather being the normal.Something within a few blocks of the ocean in a nice area,first floor,two bedroom,small or otherwise fenced in area.These are requirements for any pet owner. The problem is finding such a listing. Any help from you or your many followers would be of special interest. Thanks for any help put forth.

    ReplyDelete

Subscribe to: Post Comments (Atom)