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Home foreclosure not always the best or only solution

When homeowners in Florida are facing a loan default, there are a few options available. They may try to sell their residence, but in many cases there will not be enough time to find a qualified buyer. The remaining options may consist of having the foreclosure process commence or getting the mortgage lender to approve a short sale. Losing a home and the equity in it is not appealing in any circumstances, but there are relative benefits and disadvantages associated with these tactics.

A homeowner can choose to undergo the foreclosure process with an understanding of the steps involved and opportunities for recovering from default. There are at times the possibility to obtain a grace period or a loan modification from a lender. Borrowers can attempt to stop the foreclosure process and recover from a default by requesting a forbearance from a lender that would allow for the suspension of payments for a specified period of time.

A short sale may be another route for borrowers. This would entail having the lender agree to a sale of a home for less than the outstanding mortgage. However, not all lenders will do this, and there are consequences to a short-sale seller who will have to report the deficiency as income for tax purposes.

The threat of foreclosure can be frightening for those already facing financial challenges. Affected homeowners may be burdened with the resulting loss of equity and an adverse impact on their credit along with the need to find a new residence. In some cases, there may be available defenses to a foreclosure action, including an improper filing by the lender, that an attorney who has experience with these matters can assert on behalf of a homeowner.

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