Since 2008, more than 30,000 homeowners in the Charlotte area received a foreclosure notice and the majority never considered a short sale as the alternative to foreclosure. If a mortgage modification is not right for you, a short sale may be the best alternative.
A short sale allows the homeowner to sell their home for less than what is owed on the mortgage. The real estate fees, taxes, and seller’s closing costs are all absorbed by the lender. This is a great alternative for homeowners who are facing the prospect of missing mortgage payments due to a reduction in pay or unemployment.
Why Not Just Walk Away?
In a nationwide study of foreclosed homeowners, 70% never listed their home for sale. In states like North Carolina and South Carolina, this could have disastrous consequences depending on the type of mortgage you have. South Carolina does not offer protection to foreclosed homeowners against future legal action from the mortgagee. North Carolina does however it is limited and it is advised to discuss your specific situation with an attorney before exercising that option. With a short sale, future action can be negotiated away so that there are not any surprises years later.
With a short sale, some programs like the FHA Pre-Foreclosure Sale Program and HAFA will compensate you, the homeowner, at closing for participation. This relocation assistance can be used to pay down other debt or to secure housing elsewhere after closing.
Fannie Mae, Freddie Mac, and the FHA all have programs for new borrowers that want to own a home again following a short sale. Unlike a bankruptcy or foreclosure, borrowers can obtain a mortgage after a short sale in three years.
Who Is Eligible For a Short Sale?
Approximately 80% of all mortgages are eligible for a short sale. If your loan is backed by Fannie Mae, Freddie Mac, or the FHA you are eligible. Borrowers must have a hardship in order to qualify for a short sale in the Charlotte area. Hardships are classified as (but not limited to):
- Death of a spouse or loved one
- Reduction in income
- Unemployment
- Relocation for employment
- Overwhelming debt
- Medical expenses
- Divorce.
Missing mortgage payments are not a requirement however owing more on your home than what it is worth is. Unfortunately, many homeowners in the Charlotte area purchased or refinanced their home during the run up in home values from 2003 – 2008. Now, they have a mortgage greater than the value of the market value of their home and a short sale is the only option to sell.
Learn More About the Short Sale Process
Read Short Sale Frequently Asked Questions
Get Answers To Your Short Sale Questions on our Short Sale Blog
Contact Us to Start your Short Sale Today!
