Posts Tagged short sale

I owe more on my house than it’s worth, and I want to move out. Can I do a short sale?

Posted by David Leon in Short sale on 28/04/2010


Possibly. The bank will need to approve the short sale terms. You cannot receive any money back from the sale of the house. We can assist you with the documents, help you deal with prospective buyers and introduce you to our contacts to help complete the process. Please call us at (214) 696-0021 for more information.

If you would like to discuss this with our firm, please call us at (214) 696-0021, or click below to instant chat with us.

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I owe more on my house than it’s worth. What are my options?

Posted by David Leon in Foreclosure, Real Estate Law, Short sale, loan modifications on 28/04/2010


1. Do nothing. This will usually lead to a foreclosure of the house. The bank will obtain possession, and then file a “forcible entry and detainer” (called F.E.D. or F.E.&D). After the FED is filed, the bank will have the occupants of the home evicted, and their property placed in the street.

2. Attempt to do a loan modification. In a loan modification, a borrower is requesting the mortgage company to change the terms of a loan, such that the borrower can afford to keep the house.

3. Attempt to do a “short sale” on the house. This is a procedure in which you sell the house for less than what is owed. This requires the bank’s permission.

4. Attempt a work out plan with the bank. In these plans, the bank will offer different services. This can include a forbearance (agreement to suspend loan payments for a given time), recapitalization (taking the missed payments and adding them to the principal of the loan), or extending the loan (taking the missed payments and applying them to the end of the loan.)

If you would like to discuss this with our firm, please call us at (214) 696-0021, or click below to instant chat with us.

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How does a short sale work?

Posted by David Leon in Foreclosure, Short sale, loan modifications on 17/06/2009


Let’s assume Linus takes out a $50,000 mortgage to buy a house. After moving in, Linus realizes that he no longer afford the mortgage. Linus’s friend, Lola, would like to buy the house but she can only afford to pay $45,000.

The bank, not wishing to acquire another property via foreclosure, may agree to allow Linus to “sell short”. This means that Lola could pay the bank $45,000 purchase the home.

In this case, the bank would suffer a $5,000 loss. In most cases, Linus would have an income tax consequence of $5,000 for the bank’s forgiveness of debt. In some cases, the bank may sue Linus for a deficiency.

If you would like to discuss this with our firm, please call us at (214) 696-0021, or click below to instant chat with us.

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What is a short sale?

Posted by David Leon in Foreclosure, Real Estate Law, Short sale, loan modifications on 17/06/2009


A short sale is a sale of real property, in which the sales price is less than the mortgage on the property. For example, let’s suppose Dave has a house, but owes the mortgage company $100. The house is worth $60. In order to avoid a foreclosure, Dave can ask the bank to allow him to sell “short”, thereby allowing him to sell the house for $60 (or less), and walk away from the sale. Because the sale was for less than the loan amount, there is a “deficiency” of $40. The bank may forgive the remaining $40 balance of the note. In most instances, Dave will have a taxable income of $40 for the amount of the forgiven balance (called a 1099). In other cases, the bank will not forgive the deficiency, and they may sue Dave for the $40 deficiency.

If you need help with a short sale, please call us at (214) 696-0021.

If you would like to discuss this with our firm, please call us at (214) 696-0021, or click below to instant chat with us.

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I want to abandon my property and walk away from the loan. What should I do?

Posted by David Leon in Foreclosure, Real Estate Law, loan modifications on 17/06/2009


You have a few common options.

1. You can do nothing. The bank will proceed with its foreclosure action and reclaim the property. This is usually the worst option to take. In some cases, the mortgage company might not make enough on the sale to cover the loan. The bank may have the option to sue the borrower for the deficiency.

2. You can ask the bank to accept the property, and dispense with the foreclosure. In most cases, the bank will not take any further action. This is typically called a “deed in lieu of foreclosure.”

3. You can attempt to sell the property. If you sell it for more than the loan, plus closing costs, you keep the difference. If you sell it for less than the loan, the bank may waive the difference. This is called a “short sale.” In a short sale situation, the borrower should not receive any money from the sale. Also, the borrower may have to pay taxes for the amount of the debt that was forgiven by the short sale.

Before you make this decision, you should discuss it with your accountant and a lawyer. Our office will give a free telephone consultation regarding your options if you no longer wish to keep your home.

If you would like to discuss this with our firm, please call us at (214) 696-0021, or click below to instant chat with us.

Please call me:


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