Chicago Short Sale Attorney

Illinois Loss Mitigation Lawyer

Short sales, and other forms of loss mitigation, are increasingly more common in today’s economic market.  Homeowners  are finding themselves “upside down” with their mortgages, which means that they owe more on their mortgage than their home is worth at the time. 

The most recent refinance and real estate booms in the Chicago area have caused an upsurge in the number of homeowners that are overextended financially and face potential foreclosure on their home.   If you have found yourself in this situation, you are not without options.

The skilled Chicago short sale lawyer at Pissetzky and Berliner, LLC has vast experience helping homeowners avoid foreclosure through a short sale or other form of loss mitigation.

What is a lender short sale?

A short sale is a sale of the property in which the lender agrees to accept less than a full repayment of the mortgage amount and the homeowner is able to avoid foreclosure.  Lenders are more likely to agree to a short sale if it will yield a greater return on their loan than a foreclosure sale.   Because the foreclosure process is expensive for lenders, they can typically limit their losses by granting a homeowner approval to sell the property in a short sale.

What benefits does a short sale offer rather than a foreclosure?

A short sale is generally more advantageous than a foreclosure since the homeowner’s credit score will not be as negatively affected as it would be following a foreclosure.  When a homeowner sells his or her property through a short sale, the loan will deemed "paid" on the credit report.  The credit report will, however, include a notation that the loan "settled for less than originally owed," which is much more favorable than a foreclosure designation on a credit report. 

In addition, if a property is sold through the foreclosure process, Illinois law may hold the homeowner liable for the unpaid difference between their mortgage balance and the amount the home yields in a foreclosure sale, which is less likely to occur in a short sale.

How do I know if I qualify for a short sale?

Your lender will require that you submit information in your short sale application affirming that you are, in fact, suffering from economic distress.  If you are not suffering from economic distress, the lender will expect you to hold on to the property and continue to make your monthly payments until you can sell the home for an amount equal to or greater than the outstanding mortgage balance.   You may be required to submit previous bank statements, affidavits of income/assets, or other financial information to your lender as part of your application for short sale approval. The more sympathetic your financial situation, the more likely the lender will be to approve your short sale.  The lender will also focus on the current property value and not the loss amount when assessing whether to accept your application for a  short sale. 

Will I be released of all liability to the lender? 

In most instances, the lender authorizes the short sale without requiring the seller to take on any additional repayment obligations.  In other words, a short sale will typically release the homeowner of all liability on the mortgage.  In some instances, however, the lender may obligate the seller to sign a promissory note that obligates the seller to repay the “forgiven” portion of the loan amount (i.e. or the difference between the sale price and the amount owed on the mortgage). 

What should I do if I am unable to make my mortgage payments?

If you are unable to make your mortgage payments on your home, you should immediately seek the assistance of an experienced Illinois short sale attorney.  Pissetzky & Berliner has significant experience assisting residential homeowners and commercial property owners with short sales and other methods of loss mitigation, such as a deed in lieu of foreclosure.  

We will help you through the entire process.  We will contact the lender, assist with the short sale application, and communicate with the appropriate manager at the lender to ensure that the short sale process proceeds as quickly and efficiently as possible.

The skilled Chicago real estate attorney at Pissetzky & Berliner frequently advises real estate agents and brokers on how to best market and sell a property being sold as a short sale.  We are available to provide free seminars and presentations for real estate agents and brokers interested in learning more about the short sale process.

If you find yourself unable to make your mortgage payments, or you are a real estate agent or broker with a client who is considering a short sale, contact the experienced Chicago short sale attorney at Pissetzky & Berliner at (312) 566-9900 today to schedule a free consultation to discuss the short sale process.