Short Sale vs. Foreclosure

Orlando Short Sale and Foreclosure Attorney | Short Sale vs Foreclosure: Which one to Choose?

Orlando Short Sale vs. Foreclosure Overview:

• What is a Short Sale?
• Qualifications for a short sale
• Short Sale vs. Foreclosure

Orlando Short Sale vs. Foreclosure Details:

What is a Short Sale?

A Short Sale occurs when the Seller, who needs to sell their home, owes more in debt secured by the home than what the seller can expect a buyer to pay for the home. There are many ways to lose your Orlando home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; however, not all sellers or all properties qualify for short sales.

Qualifications for a short sale

To qualify for a short sale your home’s value has to have dropped, the mortgage should be in or near default status, the seller has to have fallen on hard times, and the seller does not have assets. On April 12, 2011, a new law was introduced in the U.S. Congress by Representatives Tom Rooney (R-FL) and Robert Andrews (D-NJ) known as the “Prompt Decision for Qualification for Short Sale Act of 2011″. The law will require lenders to give an approval, disapproval, or a status on approval of a short sale within 45 days. While the law does not require a 45 day time limit to be met (the lender can ask for additional information), it does place some obligation on the lender to respond.

Short Sale vs. Foreclosure

In a short sale, property is sold and lender accepts proceeds as payment in full; you may be released from any deficiency judgment liens filed against you; No foreclosure reported to credit bureau; it reflects on your credit report for 1 - 1 1/2 years, and finally your FICO score may drop between 75 -125 points.

In a foreclosure, the lender takes title and forces sale of the property; the lender has the ability to file a deficiency judgment against you and any other property you may own; it will be reported to your credit bureau; it will reflect negatively on your credit report for 3 - 5 years; and your FICO score may drop between 200 - 280 points.

If you’d like further information about short sales and foreclosure, contact our Orlando law firm at 407-647-8833

BAKER LAW, PL serves the Central Florida and seven-county Orlando area, including the cities of Sanford, Lakeland, Lady Lake, Kissimmee, Maitland, Lake Mary, Oviedo, Winter Garden, Winter Park, Windermere, Lake Nona, Apopka, Mount Dora, Winter Springs, Longwood, North Orlando, South Orlando, East Orlando and West Orlando, Melbourne, Titusville, Cape Canaveral, Daytona Beach and New Smyrna Beach, and the counties of Orange, Seminole, Lake, Polk, Brevard, Volusia and Osceola.