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What is the difference between a short sale and foreclosure? Upside down, should I walk away

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September 16 2011 - Gurnee
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Short sales are almost always better than a foreclosure. Banks have now streamed lined the short sales process making the process a little less painful. If you are successful with a short sale, the bank will release you of the balance of the loan. Be sure to consult an attorney & tax professional.
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August 02 2012
A short sale hurts your credit less than a foreclosure, but the lien holder NEVER agrees to release you from the resulting deficiency until AFTER the property sells and then they may or may not agree to do it. Do not assume that they will do it. If you have a j-o-b and you have assets and look like a stable candidate then why should they let you off the hook? What they do is sell your deficiency in a bundle with others to a bill collector because they are better set up to go after people. That is not what banks do.
You need to speak with an attorney and perhaps an accountant to review your entire financial situation to find the right course of action.
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September 16 2011
Yes, I agree with Felicia. 

A short sale is when you still own the property but will not be able to sell it for what you owe the bank on your mortgage.  The seller typically will negotiate with the bank to take less than what they are owed ... thus the "short" designation.  The bank is willing to do this to avoid the additional costs of foreclosure where they take the property back from the owner due to lack of payment.  In a foreclosure, the owner incurs serious credit issues that take years to resolve.

Definitely talk with an attorney and/or credit advisor, but in most cases you will most likely be better off trying to do  a short sale versus walking away and letting the bank foreclose.

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September 16 2011
A short sale is when a seller work with their bank to have the bank agree to accept a lesser amount then they are owed and release the seller from any further financial obligations. If you just walk again and let a foreclosure happen, the bank can come after you for any deficiency. Consult an attorney.
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September 16 2011
 
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