Homeowners who are behind on their mortgage might be willing to consider just about any legal way to get out of that debt. This is especially true if they know that they won’t be able to catch up on the mortgage but they don’t want a foreclosure to plague them.
One option that some people will explore is a short sale. There are a few points that you should remember about this if you’re considering this option.
What exactly is a short sale?
A short sale occurs when you sell a home for less than what you owe on the mortgage. The lender who holds the mortgage will have to approve the short sale before it can happen. If your lender approves it, you should find out what happens to the remaining balance of the mortgage — because this can have a major impact on your finances once the short sale is completed.
Sometimes, mortgage companies will simply forgive the remaining balance after the short sale. In other cases, a deficiency judgment is issued. This would require you to pay the remaining balance. While some states forbid mortgage companies from obtaining a deficiency judgment after a short sale, Maryland is one that allows this type of judgment.
What other options do you have when you’re behind on your mortgage?
Any homeowner who’s falling behind on their mortgage payments should explore the options they have available. This includes things like short sales, refinancing and bankruptcy. Sometimes, the smartest thing you can do is talk your situation over with an experienced attorney so that you can make an educated decision about your next move.