to bring the house up to building codes. It’s easier to sell “as is,” which further limits the appeal of those properties. If you were selling your house, you’d want to invest the time and labor to make it easier to sell. In a repossession, the lender must do some of the same things — and they can’t be sure what the ultimate selling price will be.
BENEFITS TO YOU
If the lender approves your short sale application — and the sale goes as you plan — you might enjoy several benefits: • You might be able to avoid foreclosure. This could minimize the related damage to your credit and also give you an advantage when the time comes to shop for a new home and mortgage. • Avoiding foreclosure would save you the embarrassment of having auction signs posted in your yard for all the neighbors to see. • You could also avoid deficiency judgments, which can arise if the mortgage foreclosure sale fails to provide enough money to pay off the full promissory note or loan. (This varies by state.) • You can probably eliminate the balance you owe the lender for your second mortgage or home equity loan. This might not be true if the house goes through foreclosure. • Depending on your financial situation, you might also avoid having to file for bankruptcy.
NOTES OF CAUTION
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