What Is Asset Protection And How Does It Work In A Short Sale Transaction?
A short sale occurs when a property is sold by a seller with negative equity. Our expertise lies in assisting clients during this process by negotiating with their lender or bank to secure a payoff or waiver of the deficiency balance on the loan. This approach safeguards the client’s current assets and prevents future collections by creditors. Let us help you navigate the complexities of a short sale and protect your financial interests.
At CF Legal, PC., our attorneys can assist you with protecting your assets and as part of that protection, assisting in the negotiations with your lender regarding the sale of real estate. Call us at (810) 232-1112 today to discuss your case with a member of our firm.
Real Estate Short Sale Example
With short sales, a buyer would purchase the property from the lender directly at a discount on the mortgage, in order for the lender to avoid possible foreclosure proceedings or bankruptcy.
Consider this scenario: Let’s assume there’s a homeowner with an existing mortgage of $320,000.
- Net Sales Price: $310,000.00
- Mortgage Loan 1: $320,000.00
- Mortgage Loan 2: $50,000.00
- Closing Costs: $25,000.00
Our expertise comes into play as we negotiate with lender #1 to release its mortgage upon receiving a certain sum and waiver the $10,000.00 deficiency balance. Typically, Lender for Mortgage #1 will offer a nominal payment to Lender #2 to discharge Mortgage #2. It becomes essential to negotiate the deficiency on Mortgage #2; otherwise, it may become subject to collection by the creditor if not charged off. Rest assured, we’ll handle the negotiations, protecting your interests throughout the process.
Not having an attorney by your side could lead to confusion over the intricate legalities involved in this transaction. There’s a risk of facing a lawsuit from a collection agency for the deficiency balance even years after the short sale is finalized. Such circumstances might force you to consider filing for bankruptcy to safeguard yourself.
Additionally, you could be held liable to the IRS for the debt waiver. Your realtor might lack understanding about deficiencies, and regardless of whether you negotiate it or not, they will receive a discounted payment. Moreover, without legal representation, the bank may proceed with a foreclosure sale, unless you engage an attorney to request an adjournment, granting you time to find a buyer and complete a short sale. Having a knowledgeable attorney on your side can make a significant difference in navigating through these complexities and protecting your interests.
Let CF Legal, PC. help you protect your assets and future livelihood in a short sale real estate transaction. Call us at (810) 232-1112 today.
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