Short sales are growing in popularity across the country, including Indiana, for several reasons. Basically, they are a win-win solution to a very difficult financial situation. From the standpoint of the homeowner, a short sale is much better for their credit report than just walking away from the house and letting it go to sheriff sale. The homeowner is able to get a future mortgage loan quicker by doing a short sale than if the homeowner had just walked away from the house and let it go to sheriff sale.
The immediate neighbors and homeowners in the community are much better off when the homeowner does a short sale instead of just walking away from the house. Vacant homes in a community attract crime and greatly reduce home values. They create an unsafe neighborhood where children are more at risk because of the increased likelihood that the nearby vacant homes can inhabit criminals and child abduction. The community is also better off when a short sale takes place because the house is then inhabited with a property-tax-paying citizen. Those property taxes are often the funds used to pay for local public schools, libraries, police and fire departments. It’s as simple as this: when a homeowner resides in a house, property taxes are presumptively paid. When a homeowner does not reside in a house, property taxes are certainly not paid. Across the nation, entire towns are being devastated by the scourge of vacant homes caused by the foreclosure crisis.
Even the mortgage lender is better off by doing a short sale as compared to a sheriff sale. The short sale allows the lender to get more money for the house than if it went to sheriff sale. Furthermore, the mortgage lender gets their money faster on a short sale as compared to a sheriff sale. In extreme cases, the homeowner who faces a sheriff sale takes extreme action against the lender by stripping the copper wire out of the house and gutting the house for scrap material, leaving the house virtually without any marketable value. By definition, this is not going to happen in a house that is sold via short sale.
