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The Benefits of Buying a Short Sale: an Interview with Dale Forsythe of Wayman Irvin & McAuley, LLC

By Dale Forsyth

Tell us about your company and its foundation.

Wayman Irvin & McAuley, LLC was formed in 1965, when Robert Wayman, Bernard McAuley and Arch Irvin decided to leave the firm with which they were associated and form their own firm, to better serve their clients. Since that time, the firm has been devoted to the zealous representation of its clients in a diverse range of legal matters. The firm has an active practice in all state and federal trial and appellate courts in Western and Central Pennsylvania. The firm also practices in the state and federal court systems of West Virginia and Ohio, to better be able to provide the client with a broad range of services and representation.

Our experienced attorneys represent national corporations, businesses, licensed professionals, individuals, and insurance companies in solving problems. Our aim is to assist our clients in identifying and resolving issues before they develop into significant controversies. When disputes arise, we recognize our clients' best interests and seek to find amicable and cost-effective solutions when appropriate. If trial is unavoidable, our experienced trial attorneys provide the highest quality of courtroom representation.

We have offered our services to a wide range of players in the real estate field, primarily defending lawsuits filed against real estate agents and brokers, appraisers and mortgage brokers. We have given seminars on a host of topics related to these fields, for a variety of clients and professional organizations.

Please provide a brief explanation of what a short sale is.

A short sale, in simplest terms, is selling a home for a price that is below the amount of the outstanding mortgage. In a market where home fair market values are falling, and a borrower is in a situation where continued mortgage payments are unlikely, a short sale might provide a viable, though not perfect, solution through which the lender can get some substantial payment on the loan. The alternative may be foreclosure and even less of a return.

How low do short sale sellers typically go?

This is a financial decision made by the lender for the most part. They will have to agree upon a number that they feel represents the most that they can realize from the transaction. The seller will want the lender to waive the remaining obligation on the debt, so the lender will have to do some number crunching to decide on a bottom number. As the seller is not going to be making any money on the transaction, they frequently will lose interest in the sales price, opening up more possibilities for good deals.

What are the benefits of buying a short sale home?

Many parties can benefit from a short sale. From the lender's perspective, they are getting some return on the loan. From the seller's perspective, they are avoiding foreclosure and the negative impact on credit score, future financing and future employment prospects. A short sale home is frequently made at a price closer to market value than a foreclosure loan, and thus the lender benefits and the seller is faced with a lower deficiency judgment (though typically forgiven by lender). A buyer can also benefit. If it is a home that the buyer likes, if he or she can wait out the typically longer period that is required for a short sale to be approved, they will likely get a good deal. A seller, in a short sale situation, naturally does not have as much interest in the sales price, since they are not going to be making money in the end.

What is the ideal situation to buy a short sale home?

Frequently, the lender will agree to such an arrangement where, absent the sale, they will be looking at a foreclosure situation and potentially even less of a return.

One would need to have a borrower/seller who is eligible, assuming the loan amount remains in excess of the value of the house. Typically, a lender will be open to a short sale where some type of hardship has befallen the borrower (e.g., loss of a job) and he or she is likely unable to continue monthly mortgage payments. Also, it would occur in a situation where a modified mortgage or payment plan would not be appropriate.

What's the best way to contact you and your company?

Please feel free to email me with any questions, at dforsythe@waymanlaw.com. Our website, www.waymanlaw.com, describes our firm and its practice areas in detail, as well as provides contact information for attorneys most involved in specific areas of practice.

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