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Short Sale Attorney in NY

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Short Sale Attorney

At some point, life will return to “normal.” Right now, no one can predict exactly when it will happen. However it is safe to assume it will happen as the physical, emotional and economic spectre of COVID-19 recedes. New Yorkers will finally be able to go back to work, back to school and back to enjoying all of the things they once took for granted. 

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Sadly, a return to normalcy may not bring relief to all New Yorkers. As more people regain their financial footing, some measures such as the moratorium on foreclosure, may be lifted. This means many New Yorkers may still be in danger of losing their homes. Depending on the circumstances, a short sale may help property owners avoid foreclosure in New York.

Although a short sale is technically a real estate transaction, anyone pondering this option should consider hiring a short sale attorney in New York. The short sale attorneys here at Moshes Law help clients through the entire process. We begin by explaining what a short sale is in New York, and our role in the procedure. We also provide legal advice and advocacy on important issues related to short sales. These include release of personal liability, deficiency judgments, short sales and bankruptcy, and more. Contact our short sale attorneys in Brooklyn for assistance negotiating a short sale.

What Is a Short Sale in New York?

So what is a short sale in New York? This is one option for a homeowner who:

  • Is experiencing and fears falling behind on his or her mortgage payments; 
  • Has missed at least one mortgage payment;  
  • Is in danger of losing their home to foreclosure;
  • Owes more than the home is worth; and
  • Does not qualify for other forms of relief.

In this arrangement the lender authorizes the sale of the home for less than the total amount of the homeowner’s outstanding mortgage debt. However, this authorization is based on specific conditions. First, the buyer must be an individual or entity other than the bank. Second, the lender gets all of the money from the sale. Third, the lender retains the right to decide whether to forgive any outstanding amount after the sale.

How a New York Short Sale Works

The details of each individual short sale vary depending on the seller’s situation. Here’s what usually happens.

  1. The homeowner experiences financial difficulties and falls behind on his or her mortgage payments  due to unforeseen circumstances.
  2. The homeowner carefully assesses his or her financial situation and options for avoiding foreclosure.
  3. The homeowner consults an authorized representative for his or her lender regarding a potential short sale.
  4. If a short sale is a viable option, the homeowner consults other relevant professionals, including a short sale attorney in New York.
  5. If the homeowner decides to pursue this option, he or she sets the sale price.
  6. The homeowner finds a willing buyer.
  7. The homeowner submits a proposal, including all relevant information, to the lender.
  8. The lender decides whether to allow the short sale.
  9. If all goes well, the real estate transaction goes through.
  10. The parties to the transaction wrap up any loose ends.

The Role of The Attorney on Short Sales

If you are an individual homeowner considering a short sale, being represented by an attorney from a reputable law firm is essential. After all, your lender undoubtedly has an entire legal team at its disposal. Having your own attorney who knows about short sales levels the playing field.

Among other things, when you hire a lawyer, it creates an attorney client relationship.Once this relationship is established, the attorney has a fiduciary duty to you. This means he or she must act in your best interest. 

Furthermore, there is an important distinction between real estate agents and New York short sale attorneys in this context. A real estate agent can help you with certain aspects of a short sale. However, he or she is prohibited from giving you any legal advice unless he or she is also a licensed attorney. On the other hand, as New York short sale attorneys we must provide the legal advice and guidance you need to make a fully informed decision about a short sale. 

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If you are considering a short sale, turn to a law firm you can trust. Contact our law offices to schedule a free consultation today.

Release of Personal Liability

As short sale attorneys we make sure our clients in New York City and elsewhere are fully aware of what is at stake. 

For one thing, a homeowner is not necessarily off the hook if the bank forgives the remaining balance after the short sale. This is because there is no guarantee the lender will release the seller from his or her personal liability. In other words the lender may retain the right to deduct money owed from the seller’s bank account, paycheck and so on. 

Ideally, the lender’s rights to take these actions will be detailed in applicable legal documents. However, it is not always included and the lack of language pertaining to release of liability is not indicative that the bank has relinquished its rights. 

In any case, a savvy short sale attorney will include provisions in the sales contract or agreement to dissuade a lender from taking these actions.

Providing Peace of Mind

Providing emotional support is one of the most important things we do for our clients. We do this in two key ways. The first is  by demonstrating proficiency in all of the legal aspects of the case,which promotes confidence. The second is by protecting them from lenders or from anyone else who uses unscrupulous means to benefit from their financial hardship. 

A property owner involved in a short sale is less likely to be harassed by the latter than a homeowner going through foreclosure or bankruptcy. This is because foreclosures and bankruptcies are public proceedings. Short sales are not. Because short sales are private transactions we know who is involved and can keep outsiders at bay.

With us on their side, clients no longer have to worry about handling phone calls or correspondence from the lender. All communication is channeled through our law offices, giving clients relief from persistent demands for payment, threats, harassment and associated stress. 

The Basics of Deficiency Judgment

To reiterate, a short sale is a transaction in which a home is sold for less than the total amount the homeowner owes on his or her mortgage. A lender-approved transaction in which the homeowner still owes $250,000 but sells his or her home for $200,000 serves as a hypothetical example. In this case, the $50,000 difference, less any pertinent deductions is classified as a deficiency. 

Ordinarily, a lender may simply choose to “forgive” the remaining debt at this point. But without provisions protecting the homeowner in applicable documents, a lender that wants to be “made whole” might use some of the methods detailed above to try to recoup this amount. The lender may also try to do so by obtaining a deficiency judgment. Put in the simplest terms, this is a court mandate for the debtor to pay the remaining amount. 

A lien, or legal claim to other assets, is usually issued against the debtor to ensure he or she pays the amount in question. This is different from the original legal claim against the assets used as collateral to secure the mortgage. The purpose of the original lien is to protect the lender or “lienholder” by allowing it to sell those assets if the borrower defaults on the loan and cannot repay it. The lender relinquishes its right to execute the original lien as part of the short sale. 

Helping Clients Understand the Short Sale Agreement

The short sale agreement is perhaps one of the most important — if not the most important — legal documents used in this process. It is also one of the most complicated.

Short Sales in NYC

It sets forth all of the details of the transaction, along with each party’s legal rights and responsibilities. These terms include but are not limited to the listing price; cancellation clauses; what can be deducted from the sale price; who is responsible for maintaining the property during the listing; and the submission of sales contracts. Other important stipulations generally include those pertaining to the suspension of foreclosure sales; release of personal liability; circumstances under which the agreement may be terminated; and the lender’s rights if the deal falls through.

Due to the length and complexity of this document, we always take extra time to ensure our clients understand associated aspects of estate law.

Easing the Client’s Worry that the Lender Will Foreclose

Clients involved in short sales often worry that the lender will foreclose. Two things generally determine whether the lender can do so. One is the language in the mortgage agreement. The second is the language in the short sale agreement. 

For example, the lender may reserve its right to begin or continue the foreclosure process if the language in the mortgage documents allow it to do so. If it so chooses, the lender can also include language in the short sale agreement that reflects its willingness to delay the foreclosure sale date.  In most cases, a lender that is willing to delay the foreclosure date will only do so until the short sale agreement expires or the day the short sale is finalized. In most cases the suspension is also contingent upon the seller’s compliance with all of the terms of the short sale agreement. 

Whether you are closing on a real estate purchase, looking to transfer a deed, or need assistance on another kind of real estate matter, our highly experienced attorneys can help you reach the best outcome

Addressing Concerns about Short Sales and Bankruptcy

Another question that struggling homeowners often have is whether a short sale is a viable option if they are also thinking about filing for bankruptcy. As with so many legal and financial issues, the answer depends on each homeowner’s individual circumstances. 

Before providing a definitive answer about bankruptcy and short sale, our New York short sale attorneys assess each client’s situation. Are they filing for chapter 13 bankruptcy, or for chapter 7 bankruptcy? 

In most cases clients will not benefit from a short sale after chapter 7 bankruptcy. Why? This type of bankruptcy allows the homeowner to relinquish his or her rights to the home along with any outstanding associated debt. The lender gets the house back. The homeowner no longer has to worry about paying for it. As an added bonus, a homeowner that gives up his or her house by declaring chapter 7 bankruptcy isn’t liable for paying taxes on forgiven debt, as he or she could potentially be after a short sale.

On the other hand, a homeowner that declares chapter 13 bankruptcy may benefit from the completion of a short sale. The reason is that a short sale reduces the amount of debt assigned to the homeowner. Therefore, the homeowner will have less debt to pay back through the chapter 13 bankruptcy plan.

Of course there will likely be other considerations, which we will discuss with the client.


How long can a house stay in short sale?

A short sale transaction is usually a drawn-out process that can sometimes take up to a year to complete.

How to negotiate a short sale price?

Take all pertinent factors into consideration including the amount you need (as the homeowner), applicable deductions and market conditions.

Do you need a lawyer to buy a short sale?

Not necessarily but it is always prudent to consult with legal and financial professionals given the complexity of the process.

Who pays the lawyer in a short sale?

The bank does.

Who pays the real estate agent in a short sale?

The bank does.

Does a short sale hurt your credit?

Yes, but not as much as foreclosure.

Why Hire Lawyers to Negotiate Short Sales?

For homeowners experiencing financial hardship, deciding to go through a short sale is a serious matter. Someone in this situation needs a short sale attorney who is familiar not only with relevant New York laws, but also with the frequent changes to them. Our Brooklyn short sale attorneys also make sure our clients have all of the information and support they need to make fully informed decisions.

New York Short Sale

Because we are skilled negotiators, we can also work to ensure the best possible outcome for the clients who put their trust in us. If you are considering a short sale, do not leave anything to chance. Contact our law offices for a free consultation today.

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    Testimonials and reviews

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    Thanks to the Professionalism and Outsanding Customer Sevice demonstrated by The Law Office of Yuiry Moshes. I've completed many Real Estate Transactions in my years as a NYS Licensed Salesperson and Real Estate Broker. I congratulate your organization for the attention to detail and integrity you company displays.

    Greg D.

    155+ reviews

    We had a great experience with the office of Yuriy Moshes during the purchase of our home. Mr. Moshes or his colleagues were quick to respond to any questions or concerns during the process. I would not hesitate to recommend them to others. Thanks a lot!

    Yelena Gremban

    20+ reviews

    Hired Yuri to help me through coop purchase process. Yuriy and his staff answered all my questions promptly, I've had attorneys in the past that once paid would take their time and de prioritize your mails, etc..Not the case here. My initial purchase wound up folding week before scheduled closing date due to seller negligence. Almost a year later, I received same level of effort from Yuriy second time around, closed, and am very happy with professionalism and expertise provided.


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