New Jersey Short Sales to the Rescue
For a variety of reasons over the last few years many banks have started foreclosure actions but never finished them. The surplus of condominium and home foreclosures stuck in the court system along with the large number of delinquent mortgages (where the banks haven’t even started the foreclosure process) has led to the rise and the renewed success of the short sale. A short sale means the bank is willing to sell the property for less than the amount due on the delinquent mortgage.
In the past, most banks didn’t even have any short sale departments, and many good short sale offers were never approved or processed by the banks. Now that seems to be a thing of the past.
Foreclosure is not the Answer
For many banks, foreclosure is a long and costly answer to a difficult problem. The banks have to locate original documents when the mortgage notes may have been segmented and sent all over the world. In addition, the courts lack the funding to process all the foreclosures, causing a backlog of foreclosures for many months if not years.
There are other issues that the banks face in considering whether to finish their foreclosures in a soft real estate market. For example, once the bank takes possession of the property they will then have to start paying the condominium or homeowner association assessments before they can sell the condo or the home. It is rarely in their best interest to do that.
Short Sale to the Rescue
Some banks are finding it easier to just work on approving short sales for delinquent homes rather than even start the foreclosure process at all. However, because of the agreements between the banks and the companies that insure their mortgages, the banks usually won’t even consider a short sale offer unless the current property owner is at least 90 days delinquent. For this reason and other reasons, it is important to get help from professionals when investigating short sales options. Homeowners need tailored advice to determine whether a short sale is appropriate in their specific case and what needs to be done to reach a successful deal.
There are so many delinquent properties in our area and all over the country where the foreclosure process has not started. Hopefully a resurgence in short sales can turn things around. If the positive short sale trend continues, many properties will be sold without the need for the drawn-out process of foreclosure. This may help stabilize the real estate market with home values matching selling prices, allowing home equity development to return.
If you are considering a short sale, or would like further information about this complex process, contact one of our Moorestown short sale lawyers to assist you. There is truly nothing to lose. Many homeowners don’t realize that it won’t cost them anything to contact a professional legal representative to consider their options and help them with proceeding with a short sale.