Utah Foreclosure vs. Utah Short Sale
Posted by David Robinson on Fri, Oct 14, 2011 @ 07:01 PM
If you or someone you know is struggling to make your mortgage payment or currently facing Utah foreclosure, you need to understand what a Utah short sale is and how it can benefit you.
First, what is a Utah short sale? Simply put, a short sale is a tool used to prevent Utah foreclosure and minimize the damage a foreclosure will cause. Technically, a short sale is when a homeowner sells their home for less than (short of) what is owed to the lender.
Utah Foreclosure Example:
Homeowner owes $250,000 to Bank of America. Homeowner recently lost her job and needs to get out from underneath her heavy mortgage payment. Unfortunately, market values have declined in her area and the value of her home has dropped from $265,000 when she bought it to $225,000. She doesn't have $25,000 to make up the difference. She has missed two payments and her lender is threatening foreclosure.
Utah Short Sale Solution:
This is a classic short sale scenario. Instead of letting her home go to Utah foreclosure and suffering the severe negative consequences, she looks into a Utah short sale and learns that a short sale can help minimize credit damage, eliminate a deficiency judgement and can be significantly easier to recover from.
Benefits of a Utah short sale vs. Utah foreclosure
Now that you understand what a Utah short sale is, lets talk about the damage that Utah foreclosure can cause and the benefits of a short sale.
| Issue |
Utah Foreclosure |
Utah Short Sale |
| Credit Score: |
Score may be lowered anywhere from 250 to over 300 points. Typically will affect score for over 3 years. |
Only late payments on mortgage will show, and after sale, mortgage is normally reported as “paid as agreed,” “paid as negotiated,” or “settled.” This can lower the score as little as 50 points if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months. |
| Deficiency Judgment: |
In 100% of foreclosures (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment. |
In some successful short sales it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner. |
Access the full chart here.These are just two issues of many to consider when faced with Utah foreclosure. There are other issues to consider such as; future ability to obtain a loan, credit history, security clearances, current employment, future employment and the amount of a deficiency judgment. To see all the issues mentioned above and the corresponding benefits of a short sale you can download our free chart here. This chart outlines the other issues mentioned and will also outline the Fannie Mae guidelines for obtaining a new loan in the future after Utah foreclosure or Utah short sale. We hope you find this information useful as you consider your options for avoiding foreclosure in Utah. If you have found this page informative, please like the article at the top of the page. Thank you.