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A Short Sale May Be the Best Option for Those Facing Imminent
Foreclosure Says Iowa Bankruptcy Lawyer
Des Moines, IA (Law Firm Newswire) January 3, 2012 - Short sales work best for homeowners facing
imminent foreclosure. If there are doubts about this procedure, consult an experienced Des Moines bankruptcy
"It's not news that foreclosures are close to being epidemic," indicated Kevin Ahrenholz, a Des Moines
bankruptcy attorney in Iowa. "It doesn't appear to be getting that much better as time passes either. What do
people do when faced with the possibility of losing their homes? One option is to contact an experienced Des
Moines bankruptcy lawyer who will discuss, among other things, the alternative of a short sale of their home."
Short selling is a direct response to the current housing crisis and people finding themselves in desperate
situations. A short sale is an agreement between the mortgage holder and the homeowner to sell their home for
less than the amount owed. While that may seem counterintuitive, it is a good solution for banks simply because
the short sale lets them avoid adding yet another foreclosed home to their inventory.
"You should be aware that short sales are not the right solution for everyone, or every situation. More often than
not, they are most successful when foreclosure is imminently pending, and the owners are quite far behind on
the payments, or have received a default notice. Why would a bank accept a short sale? Largely because they
would lose less by taking a short sale, rather than taking their chances on the home going to auction after
foreclosure," explained Ahrenholz.
In most instances, to make this work, the homeowners need to be in the default notice stage of the
pre-foreclosure process and more than three payments behind on their mortgage. The instant the notice of
default is registered or recorded, banks get more motivated, so approaching them with the idea of taking a short
sale may well gain their interest and result in a discount.
"Your credit rating will be affected, but not nearly as badly as it would be if you lost your home in foreclosure.
It's a bit like a game of Russian roulette in some respects as you gamble on how much your credit rating will be
affected, depending on what route you choose to take," Ahrenholz commented. "The interesting thing is that
those who do go through a short sale are typically able to buy another house a lot sooner than if their house had
Short sales do not show up on credit reports. However, the status of the loan for the house will. That means that
if owners are in default on their loan, and opt to go for a short sale, it would be regarded as a redeemed
pre-foreclosure. In other words, what typically shows up on the credit report is the comment: "Paid in full for less
"Not sure if this is the right thing to do in your situation? That's a smart question and one that I can definitely
answer for you. The first consultation is free and we can discuss your situation in greater depth, plus you can
find out how a short sale may affect you," suggested Ahrenholz.
Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact an Iowa bankruptcy
attorney, Iowa bankruptcy lawyer, or set up an appointment, visit http://www.iowachapter7.com or call
309 Court Ave., Suite 805
Des Moines, IA 50309
Offices in Des Moines, Cedar Rapids, Waterloo, Mason City, and Vinton.
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