In today’s economy many people are losing their homes to foreclosure.  It is the end of a long process to retain your home when you can’t afford to make the monthly payments.  It is a sad circumstance to happen to the largest investment you will probably ever make.

How it works

You get behind on your mortgage…the bank is calling you and you are ignoring the calls because you don’t know what to do. You begin to receive letters, threats, annoying calls and the stress sets in.  IMPORTANT:  You need to contact your mortgage lien holder immediately.  They need to know you are having a hardship.  They will need information from you and hopefully they will give you some options to get current so that you don’t lose your home.

A Recommendation

Contact a Realtor immediately!  Ask him/her to give you a Current Market Analysis to see if selling your home is an option. If this option works out, I recommend that you list your home for a quick sale to avoid a foreclosure.  Sometimes, this will be called a Short Sale.  A Realtor should know the Short Sale process and should be allowed to converse with the Bank.  They are allowed to speak for you via a letter written by you giving permission for them to represent you.   There are many loan modifications available right now, I would start at the County level and progress all the way to the Federal Government as possibilities.

Short Sales

A Short Sale is when you are not able to pay your mortgage as well, but you list your home with a Realtor 1st. You send your listing agreement to the lien holder, along with their other requirements. The Bank agrees to the Short Sale and your home is put on the market.  For example’s sake, I will use the following example.  You list your home for $100,000, you get an offer for $89,000. The bank agrees to the offer and you go to close, the bank is paid and the buyer moves in.

Sometimes, the bank will forgive the difference between what you owe and what they receive.  But there could be tax ramifications so I strongly suggest you see a CPA or a Tax Accountant and a Real Estate professional before you start this process.