If you are having extreme difficulty in paying your monthly mortgage amortization, consider turning to short sale to avoid foreclosure. Short sale records appear on credit records, but borrowers who turn to short sales can make another home loan when things get better at least one year after the sale. Foreclosure almost always removes a consumerís chance of taking another home loan in the future.
A short sale is a real estate transaction in which sale proceeds fall short of the real estate loan balance. In a short sale, the lender or mortgage bank agrees to reduce the loan balance because it recognizes the financial difficulties of the borrower, the adverse effects of general economic conditions and the high number of foreclosure properties in the real estate market.
According to Travis Hamel Olsen of the National Short Sale Center (NSSC), the number of homeowners opting for short sales is increasing. He said his firm has already completed over 1,000 short sales across the country. He advocates for short sales in cases where foreclosure is the inevitable result.
If you are considering short sales, here are some insider tips to consider:
Ask for advice from short sale professionals.
Short sales are usually handled by the loss mitigation department of banks, which require certain conditions and documents before they entertain requests. It is easier on your part if you are guided by a professional. Olsen of NSSC said that his company does not charge homeowners desiring to make a short sale. His firm earns from commissions from listing agents and closing fees from mortgage lenders.
Compose a realistic hardship letter.
Explain the difficult circumstances in which you are in, focusing on factors outside of your control. Do not include items that will lead the lender to think that you should have not taken the loan in the first place because you were not qualified.
Offer a price that attracts bidders.
Set the price to a level approximating the price levels of best selling foreclosed properties in your area that have similar features with your home.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.