Stop home foreclosure: short sale as an option

If you owe more than your home is worth, you can stop home foreclosure with a short sale

Financial difficulties can cause a major upheaval in your life. You may be struggling to make your mortgage payments and unable to refinance because your home is worth less than you owe on it. To stop home foreclosure, short sale is an option that preserves your credit and helps you exit your mortgage.

A short sale isn't ideal for every situation, yet it's an excellent last resort to help regain financial stability. Basically, a short sell is when your lender agrees to let you sell your home for less than you owe on the mortgage. A third party buys the property, and all the money goes directly to the lender. Often, your lender will forgive the remaining balance. Some state laws and government programs require that the lender forgive the balance, so it is important to research your options.

Before you begin the short sale process, you should contact your lender to see if you can revise your mortgage or get a loan modification. Also, if you have private mortgage insurance (PMI) on your loan, you can sometimes make arrangements to stay in your home if your lender feels your financial situation will improve in the future. The PMI company may even advance funds that you can use to pay your delinquent balance, but the company will expect you to pay back the advance when you are financially solvent again. If these options don't work, you can stop home foreclosure with a short sale.

The first step is to get permission from your lender. Mortgage lenders have thousands of customers nationwide who need to stop home foreclosure via short sale, so they may have standard forms you must complete to prove your financial hardship. If you feel you are the victim of predatory lending practices, you may be able to convince your lender to allow a short sale even if you aren't in financial distress.

Contact your lender's loss mitigation department and discuss your options. If you need help with this process, you can contact a federal Making Home Affordable housing counselor to talk to your lender on your behalf.

Once you get approved for a short sale, you can list your home for sale yourself or hire a real estate agent who specializes in short sales. Hopefully, your home will sell quickly. Go to RealtyNow to find real estate experts in your area who can help you stop home foreclosure with a short sale.