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 rings constantly, and you don’t even have to look at your caller ID to see that it’s your mortgage companyAGAIN! They are relentless! They interrupt your dinner, your family time, and your sleep!
Hundreds of thousands of people are in this terrible situation. There are many reasons people are in foreclosure, including unemployment, or circumstances like death in the family or divorce leading to financial distress. Many are in an adjustable rate mortgage (ARM) and the time has come for the interest rate to be adjusted. In many cases, it increases significantly and people are unable to make this much of a payment each month. When they try to refinance, to get a lower, fixed rate, they find that their home does not appraise high enough to pay off the existing mortgage. Being in this tough situation is overwhelming, to say the least. Wouldn’t it be nice to just be in your own home, having dinner with your family or just relaxing, without the phone calls from your lender?
You do have options and help is available no matter where you are in the foreclosure process. If you feel that you have exhausted all other options; if you feel that you should cut your losses and walk away from this debt and start over, you should consider 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.
If you are considering a short sale, you should work with a specialist who has experience in working short sales. A good short sale negotiator will help you with the process of compiling the paperwork for the bank and they will do a comparative market analysis on your home to support a short sale offer.
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.
If the lender is wise enough to accept a short sale offer, then he cuts his losses now, rather than risk the declining values of real estate causing him to be stuck with property that cannot be sold for near what he was owed. Chances are great that he will not sell the property at all; it will sit empty for months, become vandalized, and maybe even condemned and demolished for a total loss.
A short sale is one option to consider if you do not want to continue living in your home. With a short sale, you do not get proceeds from the sale; your lender is taking less than what his is owed and giving you proof that your debt is fully satisfied. A short sale is a good way out because it stops the foreclosure process, and saves your credit report from further damage. And don’t forget, once this is behind you, you can relax to dinner with your family without being disturbed by phone calls from your mortgage company.