Is The Short Sale Option For You?

If you are a homeowner who is facing a possible foreclosure, you are most likely searching for options that will help you avoid this blemish on your credit record and injury to your pride. When the American dream of homeownership goes bad, there is a lot of damage all the way around, but with the acceptance of short sales by more and more lenders, there is a slim chance that you can avoid this problem.
A short sale is essentially an agreement entered into by yourself, the homeowner, and by your lender. In the course of this agreement you agree to sell your home for as much money as the current real estate market in your area will bear. The lender agrees to accept the price you can get as a payoff of the outstanding mortgage in full. Thus, even if you sell the house for less than you owe, you still walk away mortgage debt free.
For example, if your current mortgage is $500,000 but the real estate market in your area has softened and you can only get $450,000 for the house, your lender will accept the $450,000 as payoff of the loan. The remaining $50,000 is forgiven and you are not required to pay back the bank, neither will you be receiving an adverse notation on your credit record.
Banks prefer the short sale option since it prevents them from having to deal with the lengthy and costly foreclosure and subsequent auction proceedings. Borrowers find that this is the best way to cut ties with a piece of real estate they cannot afford and a loan they can no longer repay, all the while keeping their credit profile safe from the blemish a foreclosure would have on it.
It is not surprising that this procedure is getting more attention and many more homeowners are now investigating this as the potential for getting out from under a loan that has become overwhelming. It bears mentioning that this solution is not for everyone. Homeowners whose mortgage has not defaulted and who are not anywhere near foreclosure will not be accepted into a short sale program; banks are cautious when extending permission for a short sale simply because they are safeguarding their assets.
Permitting those who simply want out of their real estate but live in an area where the real estate market has significantly softened to the point of making a profitable sale next to impossible is not the intention of the program. At the same time, those who have defaulted on their loans but have assets that could be converted to cash in order to meet the obligations of the mortgage will not be considered eligible. Banks insist that prior to applying for a short sale option, the borrower needs to have exhausted all reasonable means of curing a default.
If you are in the position that your back is to the wall financially, you cannot sell your property at a price that will cover the outstanding mortgage loan on it, your mortgage is headed for foreclosure default, and you have no assets you can cash in at your disposal, it is time to contact your lender and discuss the short sale option. You can find out more about short sales and loan modifications on the site that we recommend: www.loan-modification411.com.