The Short-Sale Solution
Times are still tough. Unemployment remains high, the markets are improving but at a snail's pace, and people are still losing their homes in record numbers. If you own a home, and you are facing a foreclosure, you may want to consider a different emergency exit- a short sale.
A short sale is when a seller (usually facing a foreclosure) arranges with their lender to accept a price that is less than what is owed on the property. The benefit to the seller is that they can avoid foreclosure, which is far more damaging to their credit (a short sale may still affect your credit). The benefit to the lender is that they can sell the house quickly, and they do not have to go through the foreclose process. It is costly for a lender to foreclose on a property; they have to pay taxes on the house while it's listed, hire a real estate agent for the transaction, clean or maintain the property, etc. And lastly, the obvious benefit to the buyer is that they might be able to purchase a home for far less than what it's worth.
There is no such thing as a “get out of jail free” card in the real estate world, and there is usually no quick/cheap fix when you have trouble making your mortgage payments on time. However, if someone is about to lose their home, a short sale will likely be the path of least resistance. A home, after all, is an investment and as always, risks are involved with investing.
If you find yourself in position like the one mentioned above, you may want to consider contacting your lender's loss-mitigation department to discuss the possibility of a short sale. One would expect, and hope, that your lender would first try and do anything possible to keep you in your home. But the news and statistics don't lie; many homeowners are still facing bankruptcies and foreclosures. With mortgage rates recently back on the rise, it might get harder for people to stay in their homes from here on out.
Darren Daneault
Total mortgage Services, LLC
326 West Main Street
Milford, CT 06460
Phone: 203.876.2200
Fax: 203.783.5632
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