You may avoid Foreclosure by doing a Short Sale.
One Way you may Avoid Foreclosure is to get an qualified Realtor to Short Sale your home. The term Short Sale is because you are selling your home short of the balance, not short in the amount of time, many take up to 6 months and some beyond. Short Sales, which have become all to common here in Queen Creek, are used when the home value is below the outstanding loan balance.
The Lender must approve a Short Sale contract. Often lenders demand certain conditions be met in order to approve the desired short sale, such as, agreeing to a promissory note, a possible deficiency judgment or a cash contribution at closing. This is why it is important to have a skilled negotiator represent you to work to minimize your future responsibility regarding the deficiency.
Sellers need a short sale pro to negotiate with the banks to make sure the deal closes so they can move on with their life.
Another important part of the negotiations is that unlike many states Arizona has anti-deficiency statutes that may apply, protecting the homeowner’s for any deficiencies (amounts agreed to in a promissory note would not fall under this protection).
Sellers should also be informed of any tax consequences that may be involved with a 1099C (cancellation of debt)(taxable amount) for the deficient balance which many homeowners are exempt from due to the Mortgage Debt Relief Act of 2007 which is still in effect.
To search short sale homes for sale.
To search bank owned homes for sale.
I cannot stress enough the need to seek legal counsel for each individual case and how they may or may not be affected with their individual circumstance.
The other area would be in the area of any possible Tax Consequences as a result of any forgiveness of debt by the lender. Again each individual should seek advice a Tax Adviser of any impact in their individual circumstance.