Foreclosure vs Short Sale

Losing your home to foreclosure due to the incapacity to remain current on monthly mortgage payments is one the most displeasing events that can occur in one’s lifetime. Along with the losing your home to the bank, foreclosures have a lasting effect, such as, the long term destruction it has on a person’s credit score.

Unfortunately, life changing events do happen and occasionally these events may result in the inability to make mortgage payments. Fortunately, there are other options to the much dreaded foreclosure. A short sale is a very popular option for homeowners are delinquent on their mortgage payments. A short sale is described as selling your property for less than what is owed to the lender. The largest dilemma is getting your lender to agree to a short sale. In many circumstances, they will not, however, lenders would much rather do a short sale then spend all the money, time and legal documents that is involved in a foreclosure.

Short sales have its shortcomings as well. While a short sale will rescue you from foreclosure, it will also have a harmful impact on your credit score, lowering by as much as 215 points in some circumstances. This option, however, can be overcome much quicker than a foreclosure. Another downfall of a short sale would be the fact that the IRS will often consider the difference between the mortgage balance and the amount paid off by the short sale as taxable income.

The difference between the mortgage balance and the amount of the short sale is called a deficiency balance. The deficiency balance is monies still owed to the bank due to the shortfall. Often this can be negotiated down, so that the short sale will cover payment in full and the bank will not take pursuit of this deficiency balance. The homeowners may have to declare bankruptcy further down the road to get rid of any deficiency balance that may not have been negotiated.

A 1099 is often given to the homeowners as an outcome for the “income” earned from the short sale. In today’s economic state, however, lenders are so bogged down on all of the short sales and foreclosures, many of the 1099s are not sent out.

At the end of the day a short sale is not pretty and they are not simple to execute. They can hurt your credit and you may owe taxes on the “income” earned. Ultimately, however, they are a better situation than a foreclosure that will destroy your credit and the lender may still come after you in pursuit of monies owed.

If you or someone you know may be losing their property, let me know. I can help them avoid Foreclosure. The quicker you act, the easier it is to save.

First Post

So, today I begin a new venture; a blog. Today's post is to let everyone out there know my intentions in this blog. The purpose of these ongoing conversations is to allow people into my life; let people know a bit about who Mark Zoeller is, and what my thoughts are on certain issues that effect our lives and the real estate industry. I want my subscribers to know how the real estate market is going, not only nationally, but locally, here in New Hampshire and Maine. I want people to be able to comment on posts and ask questions that they may have, either about what I have written or something that is a complete 180.

In this first entry, I would like people to know a little something about me. I am from Rochester, NH, born and raised. I attended the University of New Hampshire from 2001-2006, where I received my bachelors degree in liberal arts, with a major of sociology. Like many people out there, I didn't use my major as a direction in life, however, it does influence many of my thoughts and decisions. Sociology has allowed me to be open to others thoughts, beliefs and decisions, rather than focusing only on my own.

Prior to graduation, in 2005, I started my real estate career at RE/MAX Realty Centre in Somersworth, NH. Since then I have grown to become one of the leading Realtors in my local area. Serving the Seacoast area into the Lakes Region of New Hampshire and York County Maine, However, I can stray from these areas.

I am currently playing in a hockey league based out of Rochester, I like to think I am a decent skater. Love to go skiing, I do it all, from groomers to trees. Let me know if there is anyone out there that would like to hit the slopes.

Well, you have heard enough about me. I will try and post at least once a week, so, you should hear from me by next Wednsday.