Dave Ramsey Recommends Short Sales for Underwater Sellers

I love Dave Ramsey.  I really do.  He really does offer some good, straight talk on personal finance.  And of course, I am very interested in short sales.  But honestly, I never thought to see what his thoughts were on the subject.

So when I happened to see ol’ Dave on TV the other morning talking about short sales, I Googled him and found this video.  Fast forward to the 1:10 mark and take it from there.

Dave hits it right on the nose (as he always does).  According to Dave:

  • A short sale is better than a foreclosure on your credit.
  • If you can get the “proper kind” of short sale, you can keep the bank from pursuing you for the difference.  What Dave is referring to is a full satisfaction of the debt, not just a release of the lien.  The goal is to close the short sale with no deficiency judgment to the seller.

All too often, sellers and Realtors go into a short sale with the goal of “getting the deal closed.”  Yes, the closing stops foreclosure proceedings, but it may just be the beginning of another battle for the seller.   And in the case of multiple liens (equity lines, HOA liens, etc.), the ramifications may be even greater.  Don’t start a short sale unarmed or unrepresented!  In other words, consult an attorney at the beginning of the process!

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