Can I short sale or sign over the deed to my property if it is in a Florida Foreclosure?
During these tough economic times many consumers are increasingly delinquent on their debts, including mortgage payments. Thus, many consumers are faced with the fear of their home going into foreclosure. Foreclosure has many negative impacts, especially on a consumer’s credit. Foreclosures, deeds in lieu, and short sales can all be reported on one's credit report for up to seven years. However that can be negotiated.
Deed in Lieu
A deed in lieu of foreclosure is an alternative routes given to those individuals who have default on their mortgage payments. In a deed in lieu of foreclosure, the property owner voluntarily transfers the deed to the possible forecloses property to the lender. In exchange for the deed, the lender cancels the loan, promises not to initiate foreclosure proceedings against the property owner and terminate any foreclosure proceedings if already underway. As for the deficiency balance, the lender has the option to agree or not agree to forgive the deficiency balance that results from the sale of the property.
Short Sale
Another alternative is for the property owner and lender to agree to do a short sale on the home. In a short sale, the lender agrees to sale the home for an amount less than the amount due on the mortgage. Unlike a deed in lieu of foreclosure, the ownership of the property remains with the property owner, not transferred to the lender. Lenders prefer short sales where the property is distressed and the lender does not want to go through a foreclosure proceeding, which are timely and costly. Typically, any deficiency amount in a short sale is forgiven. However, some lenders have been asking borrows to assume responsibility for any deficiency amount.
The lesson here - it all comes to the terms of the agreement you signed with your lender, especially regarding forgiveness of any deficiency amount. If you are faced with a potential foreclosure proceeding it is wise to seek the advice of an bankruptcy attorney. Contact Wood, Atter & Wolf, P.A. to speak with a Bankruptcy Attorney who can help you better understand the options available to your for resolving your mortgage debt and potential foreclosure.
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Greg Gilbert
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