A short sale is where the lender forgives a portion of the debt. Many good folks have found themselves with declining home values and rising mortgage payments. Some mortgagee's will accept less than is owed through a short sale, in place of taking ownership of a home back through foreclosure. Why would the lender do this? They can avoid the lengthy time delay of up to one year in Michigan to get the property back. They can avoid the legal costs and remove the property from their asset management portfolio. The lender is ultimately not in the business to manage properties. And in areas of declining values, the property may be worth less as they hold it. We have previous posts about Short Sales in the Ann Arbor Area and can provide a packet of information via email for you to review with your legal counsel. If you or someone you know is going to miss upcoming mortgage payments or has started the foreclosure process, this may be a viable alternative. If you visit www.AnnArborShortSale.com we can walk you through the maze of challenges so your chances of success are improved. First you should contact your lender to see if they will renegotiate your payments or any other work outs they can provide. If the lender won’t work with you, it is best to begin a short sale as soon as you realize you can no longer afford the mortgage, so that your property can be marketed to receive the best offer. The earlier you start, the better your chance of success. You may also call 888-995-4673 on a 24/7 basis – HUD approved counselor affiliated with the non profit Homeownership Preservation Foundation through Bush’s Hope Now initiative. Contact us to see if you have enough time. Many people want to know what the effects are on their credit. Generally, foreclosures show up as FORECLOSURE, and can stay on your record for seven years. Anytime you apply for a new loan or have your credit checked, the foreclosure will show up and is usually a required disclosure you must make on most credit and maybe even job applications. A short sale is listed as SETTLED DEBT, and is much less harmful to your credit. Please consult a credit company for more information. This credit information is from Michael J. Hellickson, a short sale expert at 877-303-2972. It is not our intention to specialize in this area, but many of our clients are finding this to be an option to consider. Charles Darwin says those who adapt survive. In our changing Ann Arbor real estate market, our team is analyzing and adapting.
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