Common sense might tell you that getting rid of your home in a short sale is pointless if you have declared bankruptcy. Once you are officially and legally bankrupt, you will no longer owe any money to the bank on your house. So, why bother with a short sale? When you short sell your home, there are negotiations and paperwork and closings. You probably think you don’t need the hassle.
Actually, there is a point to the short sale, especially if you ever want to buy another home. After you have straightened out your finances, you will probably want to get back into the homeownership game. In order to do that, you will need to qualify for a mortgage through Fannie Mae or Freddie Mac. Both agencies have a two year waiting period after a short sale. This may seem like a lot, but not when you compare it to the waiting period after a foreclosure, or a bankruptcy and a foreclosure. Those waiting periods can be a lot longer; anywhere from three to seven years.
If you have extenuating circumstances, you might be able to apply for an even shorter waiting period after a short sale. You may have a dramatic loss of income, a catastrophic financial event or something out of the ordinary that required you to declare bankruptcy and short sell your house. When you have the opportunity, do a short sale even when you are declaring bankruptcy.
While short sales can be complicated, help is available. Stephen K. Hachey, a Florida short sale attorney, can help you navigate this process and make the most of a difficult situation. Contact him at 813-549-0096.