Understanding How a Short Sale Can Stop Foreclosure
August 26, 2009 by Admin
Filed under Stop Foreclosure Options, Stop Foreclsoure General
A short sale can help a homeowner in foreclosure. When there is no hope that a homeowner can pay his or her mortgage payments, a real estate short sale may be a sound solution for the homeowner. You do not have to wait until you are late on your mortgage payments to start the short sale process. Learn about what is a short sale and ask your Realtor early about doing a short sale when you think that you will not be able to keep up with mortgage payments in the near future.
Understanding What a Short Sale is
A short sale is defined as a sale of real estate in which the proceeds from the sale are smaller than the mortgage balance on a loan secured by the home sold. In a short sale, the bank or mortgage lender accepts an amount less than a mortgage balance because of an economic or financial hardship on the part of the mortgagor. This negotiation is done by communication with a bank’s loss mitigation department.
How to Stop Foreclosure
A short sale is frequently done to prevent a home foreclosure. Often a bank will allow a short sale if they think that it will result in less financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A short sale is usually faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining loan balance unless settlement is clearly indicated on the acceptance of offer.
Learning about Short Sale
There are lots of books on the subject of short sale. Some books are aimed at homeowners who are in foreclosure. These books explain to them what a short sale is and how it can help them save their properties from foreclosure. There are also books for real estate investors hoping to take advantage of the foreclosure market. Foreclosed homes are generally cheap so new home buyers and new real estate investors can buy them fairly easily. Examples of books on short sale are The Art of the Short Sale, Short sales: An Ethical Approach, Doctor Foreclosure: The Secret to a Successful Short Sale, and Short Sale: A Practical Approach.
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