Short Sale Negotiation
You will want to retain a skilled Massachusetts Short Sale Attorney only you want to maximize your chances of getting short sale approved, obtain approval in the fastest manner possible, and protect your legal rights and future credit history at the same time! There are real estate agents and short sale firms advertising themselves as short sale negotiators — and some are really good — however, they are not licensed to provide legal or tax advice, and you must seek that advice elsewhere at additional cost. With a Massachusetts Short Sale Attorney, the applicant can “kill two birds with one stone,” by having the attorney take over the entire short sale approval process, while at the same time, reviewing and drafting the appropriate legal contracts, including the offer to purchase, short sale approval letter and purchase and sale agreement. The cost is relatively the same across the board, and some of the fees may be paid by the lender, depending on who it is. My office employs several paralegals who will stay on top of the lenders and push the short sale transaction from initial intake, to hardship letter, to the closing table.
What Is A Short Sale?
A Massachusetts short sale is special type of real estate transaction between a homeowner, his mortgage holder(s), and a third party buyer where the property owner’s mortgage balance exceeds the market value of the property — known as being “under water.” In a short sale, the homeowner’s mortgage lender agrees to accept less than what is owed on the outstanding mortgage, thereby being left “short.” Ideally, the lender will agree to release out the entire debt including any deficiency between the sales price and mortgage balance. This is called a deficiency waiver and most skilled short sale negotiators will insist on this.
The entire process can be extremely time consuming and typically requires a lengthy negotiation with the lender by a skilled short sale attorney. Banks and loan servicers are increasingly starting to recognize short sales as their preferred method to dispose of distressed properties as they are far less expensive than foreclosure. Short sales are generally reserved for homeowners who do not qualify for a loan modification.
Do I Qualify For A Short Sale?
Homeowners can qualify for short sale approval by proving a recognized involuntary financial hardship. An involuntary financial hardship is some event, beyond the homeowner’s control, that caused the mortgage payments to become unaffordable, even if only temporarily. Acceptable hardships typically include:
- Loss of a employment;
- Curtailment of income;
- Increased mortgage payment or liabilities;
- Loss of tenant(s);
- Divorce or Separation;
- Catastrophic medical event;
- Job relocation
- Military service; or
- Death in the family
Most lenders distinguish between someone who lost their job and someone who voluntarily quit their job. Thus, unless you are able to prove that you were forced to leave your job, or asked by your employer to take a significant pay cut, a change of employment status may not automatically qualify you for a short sale. Furthermore, many homeowners have suffered multiple hardships, and it can be difficult deciding which hardship you should present to your lender when requesting a short sale.
The Hardship Letter
As a part of the short sale application process, one of our skilled Massachusetts Short Sale Attorneys will draft a hardship letter detailing why you are no longer able to make mortgage payments on your home and why you qualify for a short sale. The hardship letter can be one of the most important aspects of the short sale process and should be as detailed as possible, telling a compelling story about the applicant’s individual circumstances.
For more information about Massachusetts short sales, please read our award winning Massachusetts Real Estate Law Blog.