Short Sale Process Tampa Florida
Tampa Real Estate Attorney
A homeowner who has fallen way behind on payment of mortgage and needs to sell the home because he or she owes more on the property than it is worth takes recourse to a short sale. If you are initiating a short sale process in Tampa Florida, a short sale could just be a better option than a foreclosure.
Some states prohibit lenders from collecting the remainder of money owed on a loan following a short sale, but the banks in Florida, according to state laws, can go after the borrowers for as long as 20 years. Effectively, an individual’s finances are affected long after he or she has lost the property. However, when it comes to a short sale, the bank owner may be willing to forgive the deficiency sometimes.
See also: Tax Consequences of Short Sales
Process of short sale in Florida
When you decide on a short sale, you would need to get in touch with your mortgage company who handles the account. You would need to discuss whether the lender chooses to let a property be sold for a loss; a homeowner depends on the lender’s decision whether to allow a short sale. Seek written approval from the lender and once the amount they agree to accept as payoff is fixed, advertise your property and mention that it is a short sale.
What will the bank do after the short sale?
The bank has the option of letting go of the balance funds, called the ‘deficiency balance’. Alternatively, the bank may ask you to repay the balance by way of an unsecured note or it could seek a judgment on the balance. There are some short sale programs such as HAFA or the Home Affordable Foreclosure Alternatives, which is a federal program that requires all lenders to waive the deficit. If you are not part of such a program, you would need to negotiate the deficit aspect.
Effect on credit ratings
The effect of a short sale on the credit of a homeowner is almost the same as a foreclosure, but the owner who makes a short sale may be able to buy another home in a timeframe that is shorter than someone who has go through foreclosure. While the timeframe to wait post foreclosure is anywhere between 24 and 72 months, the waiting period after a short sale is 24 months.
The Florida Fair Foreclosure Act has ensured that there are remarkable changes to how foreclosures and short sales of homes must be carried out in the state of Florida. A significant change lies in the Statutes of Limitations for pressing action for a deficiency judgment. Prior to the Act, the Statues of Limitation ensured that a party could move action for deficiency judgment at any time till five years from the date when the sale certificate was issued. After the Act, this time limit has come down to a year. However, the revised Statue does not talk about sort sales in a clear and explicit manner, but it is typically assumed as included under the one-year limit.
If you have any questions about short sale process Tampa Florida or would like to speak to us about your options, please contact us at (813) 518-7411 or complete a free online case evaluation.
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