| The only way to hold a short sale on your property is | | | | Having your credit report reflect that the account was |
| if both the primary lender and the HELOC lender or | | | | "paid in full" versus "settled for less than amount owed" |
| second lien holder agree. In addition to the money | | | | will positively affect your credit rating. It is my opinion |
| recouped by the sale you may be required to pay a | | | | that if you have a home equity loan or home equity line |
| certain amount to one or both lenders in order for the | | | | of credit in Arizona a short sale is a viable option for |
| account to be considered closed. If you have money it | | | | you. As long as your approval letter states that your |
| is likely that your lender(s) will require you to make a | | | | lender will not seek the deficiency then it is worth |
| contribution. Some lenders will report the account as | | | | making the contribution to satisfy this second |
| "paid in full" to the credit bureau if your Realtor is able | | | | lien-holder. In Arizona, the HELOC lender has the right |
| to negotiate that. This is something that you should get | | | | to seek the deficiency after foreclosure. Therefore, by |
| in writing, however, as part of your short sale approval | | | | negotiating a settlement in the sale you don't have to |
| letter. | | | | worry about the HELOC lender pursuing you later on. |
| Homeowners may feel that it is not worth it to short | | | | Keep in mind that not all short sales are approved by |
| sale a home if they have to contribute funds to satisfy | | | | the lender. It is a case by case basis. Review the |
| the lender. If you stop and think about it though it is not | | | | Short Sale Advisory prior to hiring a Realtor or anyone |
| the lenders fault that your home decreased in value. In | | | | else to help you avoid foreclosure. If you are already in |
| anti-deficiency states, like Arizona, homeowners may | | | | the process of selling your home short of what you |
| opt to allow foreclosure rather than possibly have to | | | | owe then make sure you have a real estate attorney |
| contribute funds to a short sale. Keep in mind that a | | | | review your short sale approval letter prior to closing. |
| HELOC does not meet the anti-deficiency | | | | This may save you a law suit in the future. |
| requirements, however. | | | | To recap, a selling short of what you owe when you |
| My view is that if you have the money you should | | | | have a mortgage plus a HELOC allows you to settle |
| make the contribution to the sale. Discuss your | | | | the debt on the HELOC. If you allow foreclosure, in |
| finances with your Realtor prior to listing your home in | | | | Arizona, the HELOC lender can sue you for the |
| a short sale situation, because it is likely that your | | | | deficiency. Seek legal counsel regarding your specific |
| HELOC lender will want a contribution from you. Short | | | | situation and contact an experienced short sale agent, |
| sales are a lot of work for everyone involved, including | | | | like myself, in your area. This article is not intended as |
| the Seller, but it may very well be worth your efforts. | | | | legal advice. Contact a local real estate attorney |
| At the end of the day you know what you can afford | | | | regarding your specific situation. |
| and what is right. | | | | |