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The Orlando Foreclosure Attorney

133 W Robinson St

Orlando, Florida 32801

Foreclosure Attorney C.W. Franklin

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One of the most difficult aspects of a short sale is persuading the lender to drop the mortgage lien so the home can be sold. A short sale will typically put the lender at a disadvantage because they are releasing their lien on the home for less than what is owed. If this happens, there is a strong chance they will not recover the rest of the money. Short sales are usually only approved under certain situations.


An attorney can look over your situation and will help predict if the lender will even grant a short sale. They take into account your income, the fair market value of the home, any assets you may have, and the main factor that kept you from making payments (job loss, medical issues, etc.). A good attorney will organize this information in a way that the lender will be most likely to accept.

The situation becomes more complicated when there is more than one lien holder involved like passed due HOA fees or a second mortgage. An attorney will negotiate with all the lien holders and ensure everyone agrees before proceeding with the deal.

Do You Need an Attorney to Negotiate Your Short Sale?

If you do a short sale with terms that are not in your favor you may be responsible for the leftover debt. Attorneys help prevent this from happening.

A short sale happens when you get permission from your lender to sell your property for less than what you owe on it. You must find a buyer with a legitimate offer and submit it for the lender’s approval. It is frustrating because you will never know what price the lender will accept. If your home is in foreclosure you have a limited amount of time before the bank is able to just sell the home at auction. An attorney helps by giving you more time and leverage to allow the short sale to go through.

Think of it like this:

Let’s say you owe $100,000 on your mortgage and you find someone who is offering to buy your home for $90,000. If the lender agrees to let the home be sold for that amount you will still owe the lender $10,000. This is known as a deficiency. After the sale the lender will usually sue you for it if you live in Florida. This can be avoided by negotiating a deficiency waiver prior to the sale of the home. This is where the foreclosing party and the borrower sign a legal agreement stating the borrower will release ownership of the home to the bank as long as the bank agrees not to come after the borrower for the deficiency.


Sounds good, right?


It’s not easy. The foreclosing party will not easily be convinced to sign a deficiency waiver. Think about it. You are basically asking the lender to wipe away any additional debt left over from when the home sells at auction.

Example Conversation without an attorney:


Borrower: Can I borrow $100,000 to buy a home?

Lender: Sure. Here is $100,000. You have 15 years to pay it back through monthly payments with a 6.5% variable interest rate.


(A few years pass)


Borrower: Soooo I kind of lost my job.

Lender: You have not made a payment in 3 months. We kind of need our money back so we are foreclosing on your home.

Borrower: No wait! I have a short sale buyer that is offering $90,000 for the home! Will you allow me to sell the home for this offer?

Lender: Maybe. What are you going to do about the $10,000 you still owe us?

Borrower: Um. Could you maybe just ignore it? Use it as a tax write off or something?

Lender: Hahaha No. You still owe us $10,000 and we will be suing you for the difference after the home sells.

Borrower: ….

Why would the lender not come after you for the leftover debt? You have absolutely no leverage. A foreclosure defense attorney provides the leverage you need to negotiate. A good attorney will threaten the foreclosing party with dragging the case out for years…


…That’s years that the lender’s money will be sitting stagnant.

…That is time they could be using their investment money somewhere else.

…Don’t forget there is a small chance they could lose the ENTIRE initial investment!

 

An attorney gives the borrower the extra time needed to find a buyer AND the leverage needed to negotiate a deficiency waiver.

Example conversation with an attorney:


Borrower: Can I borrow $100,000 to buy a home?

Lender: Sure. Here is $100,000. You have 15 years to pay it back through monthly payments with a 6.5% variable interest rate.


(A few years pass)


Borrower: Soooo I kind of lost my job.

Lender: You have not made a payment in 3 months. We kind of need our money back so we are foreclosing on your home.

Borrower’s attorney: I highly doubt that. What proof do you have that you even have the right to foreclose on my clients home? I promise we will drag this case out for as long as we need to until facts are made known.

Lender: Bring it.


(3 months pass)


Lender: Ok we really need our money. Would you like to negotiate?

Borrower’s attorney: My client would prefer to walk away from this situation. I would like to negotiate a deficiency waiver on his behalf. He will agree to find a buyer willing to purchase the home at the current market value. In exchange you will agree not to come after him for the deficiency if the home is sold for less than what he owes.

Lender: Fine. Let us sell the home and we will not come after your client for the deficiency.

Conflict Resolution

In order for a short sale to be approved, all prior lien holders must agree to the sale. You may have an issue where the original lender just wants their money back and agrees to take a loss but the HOA still refuses to budge. An attorney will figure out and organize a compromise between the borrower and all lien holders.


Reviewing Important Short Sale Paperwork

An attorney will review the short sale paperwork to make sure you are not getting the raw end of the deal. Typically before a short sale is approved the lender will give you a thick stack of terms and agreements for the sale. An attorney is able to translate the legal jargon in this and explain how it will affect you. Probably the most important aspect will be how the leftover debt (the deficiency) will be handled.


Your Attorney May Be Able to Have Your Debt Forgiven From the Short Sale (Deficiency Waiver)

Since the home is being sold for less than you owe on it, the lender will probably try to sue your for the deficiency. There are certain states that do not allow lenders to come after you for deficiency but Florida is not one of them. An attorney can attempt to negotiate a deficiency waiver prior to the sale going through. This is a written statement from the bank saying they agree to forgive any debt from the home being sold for less than what it was worth.

It is up to you if you decide to hire an attorney or not. If your home is not in foreclosure and you are attempting a short sale it would still be a good idea to have a lawyer look over the legal documents to see what you are left liable for. If your home is in foreclosure time is against you. A skilled foreclosure attorneys should be able to prevent the foreclosure from happening giving you the time you need locate a buyer and work out a short sale agreement with the bank.

Created by Attorney Charles Franklin & contributing editor Jared Speck

Quick Summary about Short Sales

What Happens To The Left Over Debt

(The Deficiency)

Attorney Home  >  Foreclosure Research  >  Foreclosure Attorneys & Government Help  >

Example #1:  Negotiating a Short Sale As a Borrower

Banks are More Willing to Negotiate with Attorneys Than Borrowers

Example #2: Negotiating a Short Sale With an Attorney

An Attorney Can Help Present Your Short Sale Offer In a Way That The Lender Will Be Most Likely to Accept

Attorneys Help Smooth Short Sale Negotiations

Conclusion: Should You Get An Attorney To Help With Your Short Sale?

do you need an attorney to negotiate your short sale

 Short Sale VS Deed in Lieu of Foreclosure

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Step by Step Short Sale Process

Learn the steps when trying to sell your home in a short sale. It’s a complex transaction that requires the scrutiny and approval of multiple parties within the bank.

Can I Defend Against a Foreclosure Without a Lawyer?

Find out why the average homeowner generally does not have the resources available to defend against foreclosure without an attorney.

Determine If Your Home Foreclosure is Eligible to be Defended

Answer 3 quick questions to see if you have a foreclosure defense case.


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