The worst thing any owner do not want is to foreclose on their home. This happens when an owner stops making payments on their home for some odd reason such as hardship. Next step is that it goes into the public record sometime after 90 days (Default). Next stage is pre foreclosure is the starting process for bank to take possession of home. This term (NOD) Notice of Default, notice will be put on front door of default and eviction possible. During that timeframe they may offer you cash for keys. Provided at this time, if owner can not make an agreement to try and bring account up to date. If not they will proceed and take you to court for foreclosure proceedings. Once in bank name, they will rehab home and go up for auction and if not sold the bank will assign home to a brokerage to sell. Owner loses all rights to the home once their name is not attached to home.
Short sale is defined when a bank agree to take less than the balance owed. This is lesser of the two evils. Foreclosure severely damages your credit, whereas a short sale you can buy a home 2-3 years provide you kept all your payments current. Short sales can take up six to ten months provided priced properly. Generally you have to be behind three months in payments to start a short sale process. You must notify the bank in writing that you are doing a short sale on your home. Each bank procedures are slightly altered. You will receive many forms to fill out and send back through your realtor. Please do this in a timely manner. Short sale stops the foreclosure process. Once home sells, you will receive a 1099C from lender on difference of what is owed minus sale price. This counts as income and how banks legally writes off home on their books. Tax filing season take this form to your accountant.
Make decision in a timely manner and hire a realtor to do a short sale if you know you cannot bring payments current within ninety days. This is very important. Any questions contact me at 407 479-8583 Facebook Kevin Sells Florida and Kevin Selling Florida.