I am not getting it, need your help on a short sale – foreclosure – bankruptcy question
I have a lot of short sale listings on my desk and so far we have closed each one of them. In every case the deficiency was waived by the banks and the homeowner did not have to file bankruptcy. Only in one case, where the bank forgave about $120,000 the seller had to bring $500 to closing. Now, I increasingly see that homeowners that think about a short sale and the bank even suggest a short sale to them, talk to lawyers and they recommend to simply letting it go, wait for foreclosure and file bankruptcy.
Can someone explain this to me?
I mean the last case was a single family home with one mortgage of $240,000 owner had paid about $250,000 for it we had it under contract for just under $200,000. In the middle of the short sale process a lawyer told the seller that they should not go forward with all this but file bankrupt ASAP.
Like I said in the beginning, I am not getting it, need your help on a short sale – foreclosure – bankruptcy question. What is going on? Why would filing bankruptcy instead of first trying a short sale be better?
Homeowners in this situation should always aim for a short sale not foreclosure or bankruptcy. Worst case scenario, if the short sale fails, foreclosure and bankruptcy are still available. Why ruin your credit more than you have to?
Can anybody explain why attorney – lawyer would recommend not to do a short sale?