Short Sales Aren't Guaranteed and All Aren't Created Equal -- Consumer Beware, Again
More and more calls and emails have inquired about short sales, among other debt problems and today's credit crisis. The misguided assumption many people seem to be making is that these "short sales" are now routine and easy. This would be an unwise assumption to make. While a short sale can be accomplished in Massachusetts or elsewhere, there are no guarantees your lender will allow a sale for less than what is owed on the mortgage ("short"). There are even times when it is to their benefit not to allow a short sale (perhaps a topic for later).
Further, the administrative logistics involved in getting a short shale approved can prove challenging if not outright discouraging in these transactions. Even in those cases where a "short sale" is ultimately allowed, you must beware because not all short sales are created equal. Are you released from future liability? What do all those contracts mean? Who is paying for what and when? The housing crisis was created in part by a lot of people being told to just sign documents and everything would be just fine. Remember, don't make the same mistake twice.
An issue that has proven to be extremely difficult in short sales has been second mortgages or equity lines, an issue for a later post, but one people should make sure they mention when it applies in their situation.
