I have been working in avoiding foreclosures and short sales for over three years now. In the early days of this crisis, I would spend a lot of time describing the definition of a short sale to Realtors and home owners! These days, most know the basics of short sales and I talk with them about the details and benefits of going this route.

I am a Realtor and Investor. I work with people all over the US helping them to find a way out of tough situations with their real estate. Most people I talk to have issues with less income coming in and/or their mortgage payments going up. On top of that most of the time their real estate is worth a lot less than what they owe.

Solutions: Well, most people start with talking to their bank and trying to get a modification on their mortgage. This can work, but in my experience, most of the time the reduction in payments are not enough to help them out of their situation. Also, the banks are strict on how much income you may have in order for them to do a modification. A lot of people have too little coming in.

A second way that we may suggest is legal foreclosure defense. A lawyer looks over your mortgage documents and makes the lender come up with all the proper paperwork. This can delay the foreclosure for a long time!

After going through these steps, often it will still come to a foreclosure or short sale as a long term solution. The preferred method is usually the short sale. Credit is damaged much less and often nothing more is owed to the lender!

There are a lot of people who are in what I can the “standard” position. This is someone who has lost their job and/or have lower income and their home has lost a LOT of value and the mortgage payment has gone up. Often, people want to try to get a mortgage modification in order to continue paying lower payments and stay in their home. I totally agree with this as a first tactic to use. BUT, the end result is usually too little a decrease in payments and they end up right where they started.

If these don’t work as expected, a short sale can be used. Negotiations can occer with the lender and a short sale is approval to sell it at current market value. The owner can often find another housing arraignment at a much lower price. The amount owed to the bank after the sale can be dismissed along with the tax liabilities! This can be the best solution for owner! Foreclosure and bankruptcy can leave the home owner with debt and liabilities that they were not expecting! There are many lawyers that can help you with your questions. Comment here or email/call me with questions. We are glad to answer!

Looking to find the best deal on short sales, then visit www.americanproperties1.com’to find the best advice on avoiding foreclosure for you.

This entry was posted on Tuesday, December 29th, 2009 at 8:52 pm and is filed under Finance.