A Short Sale may be an option
Facing foreclosure is not only a financial crisis for Atlanta homeowners, it is can also be an emotional crisis. So this is a time to take stock and examine your options with your Atlanta home.
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Why Foreclosures happen
There are several reasons why Atlanta homes go into foreclosure. Perhaps the Atlanta area home was purchased at the peak of market and just before prices started to fall. Another scenario might be that the mortgage was interest only, so no equity was built up. Or perhaps the mortgage was an ARM and now the interest rates have risen, making it difficult for the owner to handle the mortgage along with daily expenses. The reason is part of the past, and owners must now deal with the future. The first item on the agenda should be to avoid foreclosure in Atlanta.
If you can still pay your Atlanta mortgage for the foreseeable future and don’t need to sell your home, then your best bet might be to wait out the market until the Atlanta Real Estate market is more favorable for sellers.
If you are unable to pay your current Atlanta mortgage but could if refinancing was in the picture, you should negotiate with your Atlanta lender. If they decline to refinance then you should contact one of the government agencies offering assistance to homeowners who find themselves in your situation. This solution might include the agency working with your lender to strongly encourage them to refinance your home rather than foreclose.
The National Association of REALTORS® has created a useful document for homeowners in “How to Avoid Foreclosure and Keep Your House” if you are in trouble it is an excellent place to start. Some of the resources cited in this document include:
For immediate advice, call 888-995-HOPE To speak to a counselor on how to avoid foreclosure. Available in English and Spanish, 24/7. Or visit their website for more information.
The reasons your Atlanta lender might not want foreclosure is because it really represents a no-win situation for both parties. A foreclosure is expensive and takes a great deal of time, and the lender ends up with a house they really don’t want, and if it goes to auction it likely will sell for far less than it should.
Why a short sale is in your best interest.
This is a step above foreclosure. Both show up on your credit report, but the short sale is less of a black mark than a foreclosure. While foreclosure is a legal settlement where lawyers and possibly their fees are involved, a short is between you and your lender, and you will be more able to buy another Atlanta home, obtain credit cards at a better rate or even renting an Atlanta home sooner than if you had gone through foreclosure. There is also a a new tax provision that waives income tax took effect 12/20/07. The provisions excludes forgiven mortgage debt on a principal residence for the period of January 1, 2007 through January 1, 2010. Previously forgiven mortgage debt was considered the same as taxable income. Ask your CPA for further information.
Read Also: Five Tips to purchasing a Foreclosure
An Atlanta short sale is an involved process, but in a nutshell the seller needs to establish a selling price with the help of an Atlanta Realtor, find a buyer and with an offer, in hand present the offer to the mortgage holder. Along with the offer you must disclose your finances as well as a hardship letter that details why payments can no longer be made. Check with your Atlanta lending institution to see if there is other information that is required. If the offer is ultimately accepted then you have taken the first step in your financial recovery.
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