Here we are at the end of a stressful financial year for South Florida, and it’s time for all those New Year’s Resolutions to be made for 2012.  Finances are considered, plans are made…and for Florida homeowners with underwater mortgages or with defaulting home loans who are sitting in homes with the stress of a possible foreclosure, the question of what to do about their home must be on their minds.

So, what about short sales … should you short sale your Florida home in 2012?  Here are some things to consider.

First of all, let’s recap.  What is a short sale anyway?

A short sale is a deal made with a buyer to buy your home for less than the amount that is left owing on the home loan.  That difference – between the sales price and the mortgage balance makes the sale “short” of covering what the seller owes on the note.

If the bank okays the deal, then the short sale goes through and the third party buyer takes the house.  Lots of the pressure of the debt goes away….however, and this is a BIG DEAL, if the lender did not agree to take the short sale as full payment then that bank can sue the seller for the “short” (that difference) anytime in the next several years.  That’s a deficiency lawsuit and the bank can get a deficiency judgment.

• For more on short sales, please review our discussion of Florida short sales in this Foreclosure Fraud economy here.

Fighting against a deficiency lawsuit or deficiency judgment are things that we cover periodically here.  For more information on deficiencies, check out:

• Florida Deficiency Lawsuits Against Florida Homeowners
• Florida Deficiency Judgments Based on Bank Fraud

Will things be different in 2012 that will make Short Sales a better option for Florida homeowners in 2012? Probably.

Things are changing here in Florida.  Among them are pending legislation in Congress to limit or gut the bank’s ability to sue for a deficiency judgment after a short sale.  Read the details about that here.

Other things should be considered, too.  For one things, lenders are becoming more interested in short sales than they were in the past.

• In 2011, for example, Bank of America offered deals to its home loan customers for short sales – offering them up to $20,000 to short sale their homes and skip past a foreclosure altogether.
• In Orlando, short sales tallied as 76% of all home sales in November 2011.
• In other hard-hit housing markets, like Las Vegas, it is predicted that short sales will be popular with banks in 2012.

Short Sales are Not One Size Fits All

In Florida, there are many different kinds of lenders.  The biggest of the big, like Bank of America, sell home mortgages to Florida home buyers right alongside small neighborhood lenders that operate throughout the Florida communities.   Some lenders may be more interested in a short sale of a house that has a mortgage with past due payments than others.  For instance, the Big Banks often have lots of REO (real estate owned) properties on their books, and they might be more interested in a short sale than a smaller lender who doesn’t have that much real estate to manage and re-sell.

Your home situation is unique to you and deserves the respect of a thorough investigation.  Is the lender friendly to short sales?  Does the lender have good paper on the house?  Is there a title concern?

Bottom line, 2012 may be a great time for a Florida short sale; however, to make that decision the wise Florida home owner will seek out an experienced Florida real estate attorney or Florida foreclosure defense lawyer to look over their situation and provide some suggestions on what their best options are in dealing with their Florida home.