Are You Considering a Short Sale?
A short sale is a process by which the homeowner agrees to sell their home prior to foreclosure at a price that is less than the current balance due on the loan. It allows the homeowner to avoid the pain and humiliation of foreclosure as well as the devastating damage to their credit score.
There are possible drawbacks, however. The I.R.S. will see the debt forgiveness as income, and your lender may want to pursue a deficiency judgment, meaning that they may want that money back. So if you considering a short sale, make sure to consult with a lawyer and/or CPA. And since each lender treats short sales a little differently, you will need to find out what your lender’s short sale policy is.
