When you simply close the door and leave, you are free of the home but not of its mortgage. There will still be legal consequences even after you have left the property behind. If you are facing negative equity, the bank will sell your home for whatever they can get, but compared to what you owed - their losses can be considerable. The difference, known as a deficiency judgment, becomes a lien that can threaten your wages and prevent you from ever buying again. It is definitely better to stay put and sell. A short sale formally releases you from any deficiency liens and keeps you in the house, mortgage free, for months longer.

A bankruptcy can briefly stall a foreclosure, but never stop it. Whether you file a 7 or a 13, you must keep your monthly payment current throughout the bankruptcy (and afterward) or your lender will resume the foreclosure against you. If your goal is to keep the house and you still cannot afford the payment after bankruptcy, a loan modification is for you.

Only a late mortgage payment can harm your credit. A short sale is a settled debt, not an unpaid obligation. Often people struggling to sell a home fall behind on their loan. This is usually because the house is priced too high or because the realtor is not familiar with the short sale process. The best way to avoid credit damage is to find the right realtor and attorney who can conclude the sale quickly, before you fall behind.

If there is one thing to remember about modification, it’s the word VOLUNTARY. Lenders decide if you are eligible for a modification. They are free to deny applicants without following the Obama guidelines, and they do not have to hold off foreclosure or collection unless they want to. Never trust the customer service agent at the end of an 800 number. Seek competent legal representation if you want to be sure the foreclosure is on hold while you pursue a modification.

When you are delinquent, banks often urge you to give them a deed in lieu of foreclosure. In doing so, they conveniently avoid all attorney and court costs they would have otherwise been forced to pay. Unfortunately for you, the homeowner is often left out in the cold, literally, after giving back a deed. You will be required to move out at once. Additionally, unlike in a sale, you will receive no compensation for personal things like appliances or fixtures left behind. Even worse, the fine print on surrender documents may state that a home you gave back yesterday could cost you money tomorrow. Some banks actually sue a borrower for the shortage after sale.

Homeowners can refinance whenever they want – before, during or after a modification approval (or denial). Unfortunately, credit guidelines have never been stricter, and most people trying to modify are also behind on their mortgage. While the modification won’t hurt your refinance chances, your payment history might. In addition, if you owe more than your home is worth, it will not appraise out for refinance purposes. To improve your chances of modification success when refinancing is not possible, retain a professional to help with the modification process.

Absolutely not! A short sale approval is based on your home’s current value and the price a buyer is willing to pay. Many people who want to sell in today’s market have negative equity and yet remain timely on their mortgage. Being current with your loan has nothing to do with the short sale process. In fact, if you plan to sell short and buy something new, keeping your mortgage up to date will make loan approval for your next home easier.

After a foreclosure, the shortage between what you owed and what the bank collected at sale is known as a deficiency.  This amount can legally be collected against your paycheck, your bank accounts or other any property you own. If you have any other assets to protect, a short sale is the best way to avoid all deficiency liability.  In a short sale, your bank will most always forgive the uncollected mortgage balance in exchange for a settled payoff. In these cases, when handled properly, a short sale ensures your lender cannot come after you later for any deficiencies.

In most cases, people who pursue a short sale do move out. There are cases, however, when an investor or friend purchases the property and allows the “seller” to rent back for a period of time. There is nothing illegal about renting a home you previously owned. It is important to fully understand that as a tenant you no longer have the same rights you had as an owner.  Be sure you fully understand your arrangement with the new owner.  And most importantly, be sure you have experienced legal counsel prepare all the relevant documents to preserve any rights you expect your new landlord to honor.

With most law firms, the answer is YES. The typical lawyer will charge you by the hour to negotiate a short sale with your bank. This fee structure is open ended and can add up to thousands of dollars in legal expense for you. By contrast, at Aiossa and Associates, the answer is NO. Your bank will pay realtor commissions, attorney fees, unpaid property taxes and routine seller charges at closing. As part of our contract with you, we accept whatever the bank agrees to pay us at closing. With the exception of a modest retainer fee of $395 to $595 depending on your file, you will never pay our firm an additional penny for short sale representation.

Absolutely not! The value of your home - relative to its outstanding mortgage balance - has absolutely nothing to do with the likelihood of achieving a successful short sale. The short sale process is about what your home can be sold for today, regardless of what it was once worth or how much was loaned against it in the past. At Aiossa and Associates, we routinely achieve discounts in excess of $200,000 per property. In reality, homes that are the most severely upside down in terms of equity are the most logical candidates FOR a short sale.