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Avoid Foreclosure
Selling your home

Frequently Asked Questions About Short Sales and Foreclosures in North Carolina

What are Some Options Available to Avoid a Foreclosure?

There are at least TEN ways to avoid a foreclosure from modifying your current loan to participating in a short sale. We have created a FREE report that discusses some of these options more in depth. You can order this on the form at the end of this page. Or, simply give us a call and we’d be happy to discuss your situation to find out if any options would work for you. 336-707-9799.

What is a “Distressed Property”?

  • Property that is poor physical condition.
  • Property that is or will soon be in some stage of the foreclosure process.
  • Property owned by a person who is experiencing a period of financial instability.
  • Property on which the mortgages total an amount higher than the current value and an owner must sell.

What Could Cause a Homeowner Distress?

There are many factors that can cause a homeowner to find themselves in distress. Lenders are looking for homeowners that are in some financial distress where a foreclosure will be imminent in the near future. If any of the following applies to you, you may be qualified for a short sale.

  • Payment increase or mortgage adjustment.
  • Loss of job.
  • Business Failure.
  • Damage to Property (lack of insurance and inability to make repairs).
  • Death of a Spouse.
  • Death of Family Members.
  • Severe Illness.
  • Inheritance (beneficiary unable to cover bills, utilities, maintenance of property).
  • Divorce.
  • Separation.
  • Relocation (inability to support two households).
  • Military Service (extended active duty).
  • Insurance or tax increase.
  • Reduced income.
  • Too much debt.
  • Property Value Decline

What is a Short Sale? Isn’t it Pretty Much the Same as a Foreclosure?

Actually, there are major differences and consequences between short sales and foreclosures.

A short sale is when a negotiation is entered with the homeowners lender(s) to accept less the full balance of the loan at closing. A buyer closes on the property and the property is sold “Short” of the full balance owed. The homeowner can stay in the property during the negotiations until the home is sold.

A foreclosure is a legal proceeding by the lender in which they take back the property in order to recover the amount owed by the homeowner. The bank secures the property and forces the homeowner to leave the premises.

Do I Qualify for a Short Sale?

There are a few factors that lenders are looking for to see if you could qualify for a short sale. Please call us to discuss your personal situation. Even if you feel you may not qualify, don’t give up. It’s worth trying! Your lender would much rather short sale your property rather than foreclose.

Financial Hardship
When we submit your short sale package to your lender(s) we will include a hardship letter from you. This could be anything from a significant adjustment in your mortgage payment due to interest rates, a job loss, too much dept, business failure, sickness or you owe too much on the property than what it can be sold for.

Monthly Shortfall
This is another qualification that we will need to address to your lender(s). They want to see that you cannot afford to pay your mortgage. That is why we have created a simple financial worksheet for you to fill out to demonstrate your hardship.

Insolvency
This means that you do not have the means to pay down your mortgage. However, please realize you do not have to be broke in the eyes of the lender. The lender realizes that you have other financial obligations as well including living expenses.

Please note our Associate Wilde Law Firm will conduct all negotiation and correspondence with your lender.

Will I Have Any Tax Liability After a Short Sale?

We strongly urge you to consult both an attorney and a tax consultant before you enter into a short sale or are about to go into foreclosure. North Carolina IS a deficiency state. Click here to read more about deficiency judgments which allow a lender to go after you for their loss if you go into foreclosure.

It is important to be clear of any tax or legal ramifications either a short sale or a foreclosure would have. If you do not have an expert, we can help refer you to some great professionals who can help.

Read about your possible IRS Tax Consequences in North Carolina: The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

NORTH CAROLINA FORECLOSURE RESOURCES AND GOVERNMENT LINKS

Wondering if a loan modification would work for you? Check out the MakingHomeAffordable.gov to see if you are eligible for the government program.