Yes, a bank can sell your house for less than you owe through a short sale.
In order to get a short sale on your home, you negotiate with the lender. This can be a long and frustrating process because the lender doesn't have to agree to the short sale, even if you're in a difficult place financially. Technically, the banks/lenders aren’t required to release the lien on your home unless the mortgage is paid in full. The best thing you can do is consult with an attorney who specializes in short sales to discuss your options.
These days, more and more banks are taking part in short sales. Reasons include:
- The banks/lenders can get more money from a short sale than from a foreclosure and auction or public sale.
- There’s less chance of damage to a home if someone's living in it instead of abandoning it, which protects the bank’s interests.
- The lenders don’t lose months of mortgage payments because someone can’t afford to pay. They want all the money they can get.
If you're considering a short sale, here are some important things to keep in mind:
- Any unpaid balance owed to the creditors after the sale is called a deficiency, and you may still be obligated to pay it.
- A short sale is one of a few alternatives to foreclosure. If you want to keep your home but still prevent a foreclosure, other options like bankruptcy will serve you better.
- A short sale may negatively affect your credit rating.
Need to prevent a foreclosure in Kansas City? Our bankruptcy attorneys can help. But don't wait until time runs out! Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.