Stop Home Foreclosure

The short sale process can be long and tedious. It begins with the homeowner in a situation where their home has a lower value than the balance on their mortgage – the short sale definition. It usually becomes dangerously close to foreclosure before the homeowner accepts the probability that the home is lost and makes an agreement with the lender to begin the short sale process.

There is no short sale without an agreement with the lender. It is an agreement between both the lender and the borrower and is a transaction that contains many complex factors and considerations. Most important for the borrower is that there will be no foreclosure awaiting them on the other side of the short sale process.

After agreeing to settle through this process, the two parties must then agree on the various aspects of the short sale – and there are many. Among many other complex issues, they must decide on the selling price of the home, the amount of debt to be forgiven, property taxes, insolvency issues, various fees, and the purchase agreement. For these reasons expert help is an absolute necessity. Do NOT attempt to handle a bank short sale on your own!

The lender will require the homeowner to complete the “hardship letter” in order to explain how they ended up in such financial distress. The borrower will be required to document statements in the hardship letter through pay stubs, investment documents, and bank statements. This will provide a historical time line leading up to the homeowner’s inability to pay.

The bank will then assess the fair market value of the home and work with appraisers, brokers, and real estate agents. This is done in order for the home to be appraised properly, and for the bank to recover as much as possible from the sale of the home. In the end it’s all about business, and lenders wish to keep their losses to a minimum.

If the home is sold at an acceptable price – within the acceptable time frame, the proceeds will be set forth to settle the debt as per the agreement. Remember, the bank is not going to sit around and wait forever. If the home is not sold on time, they WILL proceed with foreclosure. You can be sure that all of these issues will be drawn out clearly within the agreement drawn up by your lender.

Just because you go through the short sale process, your credit doesn’t have to be destroyed. There are many aspects to a short sale and many borrowers have missed deadlines relating to financial issues directly affecting their credit rating. Their credit was damaged as a result. Some end up with damaged credit due to having other areas of financial responsibility involved in the short sale process. Damaged credit is not a definitive result of a bank short sale. This is one of the more prominent reasons that we have to acquire experts and then follow their advice.

Our primary goal is to complete the short sale process and end up with as little damage as possible. If done correctly, we could end up with no unpaid property taxes, stable credit, legal fees paid, and without foreclosure. We may lose our home – yes, but we’ll be in the best position possible to buy again!