A seller who can successfully complete a Short Sale will be better off than a party who lost their home to a foreclosure proceeding.

In a foreclosure proceeding, the lender may come after the seller for a Deficiency Judgment; the amount owed less than the amount collected at the sale. The foreclosure will usually damage the sellers credit to a greater degree than a short sale.

When a short sale is completed, the seller should insist upon a release from the balance owed. Congress had recently passed the Mortgage Forgiveness Relief Act which can help certain homeowners avoid being taxed on the discounted payoffs, provided it was on primary residence homes. Psychologically the seller is done with the hassle of a pending foreclosure action against the premises.

If you have any questions, concerns or would like more information email, comment this post, or call  (718) 377-7798 to speak with Michael Reinhardt.

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