Stop Foreclosure: The Short Sale when Facing Foreclosure
If you are going through foreclosure, you are not alone. Many people are facing foreclosure; they’re feeling helpless and they don’t know where to turn or what their options are.
Foreclosure hurts! You can’t eat, you can’t sleep, you have trouble functioning!
The phone drives you crazy! The mortgage company, again! Asking when you will be catching up your past due payments. They don’t care that you just sat down to a meal with your family or if you are sleeping.
Hundreds of thousands of people are facing foreclosure or are in various stages of foreclosure today. Many are stuck in a mortgage they can no longer afford to pay due to the resetting of the ARM or Adjustable Rate Mortgage. Refinancing is difficult or impossible because of financial hardship and declining real estate values. You cannot be approved to refinance if you owe more than the home is worth in today’s market.
This is a very tough situation to be in. You would love to just relax in the evening, enjoy your family and not be bothered with constant phone calls from your lender.
The good news is you have options and there are people who specialize in helping, no matter where you are in the foreclosure time-line. If you’ve done all you can and you just want out, you can walk away from this debt while satisfying your lender with a short sale.
A short sale is where your lender agrees to let you sell the house for less than he is owed if the market justifies the short payoff price and you qualify by showing financial hardship. Mortgage companies have a short sale department for handling these transactions.
You can work with a foreclosure specialist who has experience in working with short sales. The short sale negotiator will also perform a market analysis on your home to determine market value. They will help you submit other documentation to your lender to qualify you for the short sale option, including a hardship letter, financial statements, bank statements, pay stubs and other supporting information to show financial hardship and the declining value of your home.
The short sale benefits both the homeowner and the lender. The homeowner is allowed to satisfy their debt with a short payoff and not have a foreclosure recorded on their credit report. If the short sale negotiator is really doing their job, they will get a written release from the lender to the homeowner, on the debt owed, so that the homeowner is not forced to pay the deficiency.
The lender benefits by cutting their losses and taking what they can get now, rather than incurring the additional legal and financial expenses of foreclosure, while market values continue to plummet. If they wait out the redemption period, which varies from state to state, and evict the homeowners, fix the home to make it marketable, by the time the property sells, chances are good that it will be worth even less and their loss will be greater.
A short sale is an option when you feel that there is no reason to or no possibility of keeping your home. When you sell it on a short sale, you do not expect to get any of the closing proceeds. You do get the benefit of satisfying your mortgage debt and preventing further damage to your credit report. You also get to put a stop to the relentless phone calls and intimidating letters from your lender, not to mention all the letters you may be getting from attorneys or foreclosure consultants offering their services.
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