San Diego Short Sales, Why are Short Sales Effective?
Several years ago, if you were faced with a situation where you are about to foreclose on your home, had some negative credit issues and wanted to do a short sale, you would have been out of luck. That is because there would have been no reason for banks to approve San Diego short sales at all. A short sale is, basically, when a lender approves the sale of a home for less than what the home is worth, because the loan or loans on the home amount to more than what the sale could bring in. Before the recession, banks probably would have laughed you out of the room if you even hinted at trying to do this. Now is a different story though. Banks really do not want people to foreclose at this point, so they are willing to work with you.
San Diego short sales are not happening because banks want to be altruistic. The truth is that they really do not have a choice at this point. A foreclosed house does not bring in any money. Considering maintenance fees (electricity, property taxes, lawn care, etc.) banks actually stand to lose a lot of money if they force people to foreclose. The average foreclosure costs roughly $58,000 for a bank. Once a lender has to pay that fee, on top of the monthly ones, for several properties, they become much more agreeable.
If you can get the lender to agree to a short sale then that is definitely the right choice. Foreclosures, and the late fees that led to them, can remain on your credit history for up to seven years, while San Diego short sales may not appear at all. Furthermore, in some cases, lenders have the option of seeking financial restitution from homeowners after the foreclosure has taken place. This can take someone from an already troubled financial state to dire straits. With a short sale, most of the outstanding fees will be settled during the contract process, so the homeowner will not have to worry about the lender coming back later and demanding payment.
Just to be clear, San Diego short sales are not magic bullets. There are any number of pitfalls waiting to befall someone who tries to plan one haphazardly. California was one of two states hit hardest by the mortgage crisis. Yes, banks are more open to the needs of the client, but they are still most interested in staying alive in this time of trouble. It is only reasonable to assume that they would try to make up the difference somewhere. My advice is to contact an attorney, one that is familiar with short sale laws in the San Diego area. If you do that, you can stop the banks from taking the difference out of your pocket
Shanner & Associates is a leading law firm with experience in San Diego short sales and other foreclosure and bankruptcy matters. If you want to learn more about short sales and foreclosure, or to find qualified legal help in your area, visit http://www.shannerlaw.com today.
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