It is in the best interest of banks to help homeowners avoid foreclosure. According to a CNN Money news report, some banks are now offering homeowners as much as $35,000 to sell before the home ends up in foreclosure. These deals incentivize homeowners to conduct short sales before they fall so far behind on payments that they have to foreclose.
Banks lose money on short sales because the homes are typically sold for significant less than what is owed the banks. In certain cases, however, short sales make sense because they at least allow the bank to make some of their investment back. In such cases, the bank may offer the homeowner tens of thousands of dollars to sell before it is too late.
Another reason why banks often prefer short sales to foreclosures is that the foreclosure process can take a long time. They see a short sale as a better option to having to wait for months to make some of their money back. In some cases, foreclosures take so long that the house loses value. There have even been cases of homeowners refusing to clean or repair the home during the foreclosure process. Banks hope to avoid this type of problem.
It is important to remember that short sales are not for everyone. Individuals who are offered money from the bank to make the sale should first determine if they have the means necessary to catch up on their payments. The best option for many families is to remain in their homes by negotiating for a restructured loan. When this is not a viable option, homeowners may then want to consider a short sale of their property.
If you sell your Orange County home in a short sale, the proceeds from the sale will go to the homeowner. Before agreeing to the sale, you must carefully review the deal you have with your loan provider. Not all short sales result in the release of your financial obligations. If you are not careful, you could still owe money on your home even after you sell it and move away. Please contact an experienced Orange County foreclosure attorney to get the advice you need during this critical time.