Short Sale Options
Here are your options if you are in a financial hardship and can no longer
afford your home:
OPTION #1: SELL YOUR HOME
This is only an option if you have enough equity in
the home or cash in hand to cover your existing mortgage and all the expenses in selling a home.
OPTION #2: SHORT SALE
Selling your home under this option will help
minimize the damage to your credit, minimize or eliminate your tax liabilities and possibly
eliminate a deficiency judgment.
OPTION #3: LOAN MODIFICATION
This option can extend the term of the loan, add on
delinquent payments to the loan principal, and/or reduce the interest
rate to make the loan more manageable for the home owner.
Another option is a repayment plan that requires home owners to increase
their monthly payments until the loan is current. It may be possible to
refinance an adjustable rate loan with a Federal Housing Authority or
conventional fixed loan. Note that lenders will not postpone a
foreclosure just because a property is listed, although they may
postpone if you have a reasonable offer in the works.
OPTION #4: NEGOTIATE A FORBEARANCE AGREEMENT
Loan borrowers sometimes have problems with their
payments due to unexpected circumstances. This may cause the lender to
start the foreclosure process. To avoid this situation, the lender and
the borrower have the option to make an agreement called "forbearance".
According to this agreement, the lender delays his right to exercise
foreclosure if the borrower could catch-up his payment schedule in a
certain amount of time. This time-period and the payment plan depend on
the details of the agreement which are accepted by both of the parties
involved.
Note that forbearance is just for "temporary" financial problems. If the
borrower has more serious problems, for example if it is a variable-rate
mortgage and the interest rate become high enough so that the borrower
cannot afford the payments anymore, then forbearance is usually not a
solution.
OPTION #5: DEED IN LIEU OF FORECLOSURE
The advantages of this option for the homeowner are
to avoid foreclosure and not go through the difficult process of the
foreclosure process. It will release all or most of the liability to the
homeowner and allow the bank to turn around and sell the property much
sooner without the bank having to spend additional time and money going
through the foreclosure process. This would be a good option to consider
if you feel that there will be no benefit from you selling your home or
doing a short sale.
OPTION #6: WALK AWAY - FORECLOSURE
You can always let your home go to foreclosure and do
nothing. Sometimes the situation seems so overwhelming and this may be a
good option. We don’t recommend that you do this, and would suggest that
you talk to someone so you can determine if any of the options above
would make more sense. You can also contact us if you feel more
comfortable. It’s important that you talk to someone that you can trust,
and not someone that is looking to take advantage of someone in a
difficult situation. There are many real estate scams out there and you don’t want
to become a victim because you didn't seek a second opinion. You may
have some options that you are unaware of.
If you would like to get started or have some more questions, please
give us a call or , for a FREE, no obligation consultation to know
all your options before it is too late.
(619) 890-7447 or
NOTICE: The information provided is for general reference only and is not to be
construed as tax or legal advice. Consult your income tax preparer
and/or attorney for specific details regarding your individual situation.
