Arizona Bank Foreclosures for Sale – The Short Sale

At the moment the entire US is being affected by a soft job market and tight credit lending. It is not altogether bad that credit should be tight as some really bad lending practices in the not to distant past have led to a nationwide foreclosure crisis. Housing prices have dropped and US financial markets are making this situation even worse. At present the housing market is being dominated by foreclosures for sale and the amount of Arizona bank foreclosures for sale are many.

It is not a good thing that people are losing their homes to bank foreclosures, but because of the fact that investors and home buyers are taking advantage of this market, it may see the housing market correct itself. The fact that credit is tight means that only properly qualified lenders are able to raise finance to buy property. Frankly speaking bad lending practices to unqualified lenders has been the cause of so many foreclosures happening in the first place.

Foreclosure is a legal process which takes place when a home owner is no longer able to afford the mortgage repayments on their property. Increasingly today, home owners in fear of foreclosure have turned to the short sale in an attempt to walk away from a mortgage they can no longer afford. A short sale could mean that the home owner owes as much as $450 000 on a home and sells it for $300 000. But they have to have the permission of the lender in order to do this and more lenders are agreeing to this process rather than keep propping up a borrower who is continually defaulting on mortgage repayments.

This heads off the foreclosure process but does not necessarily forgive the mortgage holder the balance of the debt. In fact, only in very rare and very extenuating circumstances is the mortgage owner forgiven the balance of the debt. The short sale is a very intricate transaction which takes many months to complete, but could end up with a very relieved home owner.

The short sale has been described as the lesser of two evils by some experts. It is a way to help both the home owner and the bank make the best of a bad situation. A short sale rarely if ever covers the entire mortgage cost, but in some instances is just enough to entice the lender to forgive the balance of the debt outstanding. A seller does have to be at the end of their rope financial before a bank will consider a short sale. They are required to submit a hardship document which outlines the events leading up to the payment defaults, but once this is done and the bank agrees the short sale is able to go ahead. Shorts sales are best negotiated with the lender by a legal expert who is well versed in this process so that both the seller and the lender obtain a price which is fair.

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