Short Sale Tampa, Florida Helps Homeowners Avoid Foreclosure, Save Money

Like everywhere else in the country, foreclosures in Tampa, Florida have skyrocketed over the past several years.  One of the newest and latest foreclosure avoidance methods is called short sales in which a home is sold and its net proceeds fall “short” of covering the seller’s closing costs and mortgage obligations; the seller is unwilling or unable to cover or come up with the difference.

It is important for a homeowner to speak to an attorney who specializes in short sales before jumping into a short sale of their home.  Last year alone, approximately 11% of all real estate transactions were short sales according to a recent research study.

Short sales are especially affecting homeowners who purchased homes and rental properties during the recent boom and then later faced some type of hardship such as a job loss, death in the family, divorce, medical problems or other financial difficulties connected with the state of the economy.

Lenders are usually more agreeable to work with a homeowner on a short sale then go through foreclosure proceedings, which costs them money; whereas a short sale would least bring in some money by selling the property at a discounted price.

In many cases, the lender forgives the balance of the loan; however they won’t make as much money but they will get rid of the property which is their ultimate goal.  If the homeowners have purchased their home through the Department of Veteran’s Affairs, the sellers face a compromise sale.  This means the homeowner must pay back the shortfall if they would like to qualify for another Veterans loan in the future.

Short sale Tampa, Florida is easier to work with through the Federal Housing Administration; conventional loans are much tougher because they are contingent upon an investor’s approval.  These are more difficult to sell on the idea of a short sale because the investors want their money.

The amount of documentation a seller must provide makes a short sale different from a regular sale.  Stacks of personal financial information must be turned over to the lender which includes paycheck stubs and two months worth of bank statements, any documentation on 401(k)s in addition to a ‘hardship letter’ that spells out in detail why the homeowner is behind on their payments and deserves a short sale.