In this changing economy more families than ever are facing the reality of losing their homes. Job losses and a declining real estate market are forcing many homeowners to consider foreclosure, but there are options.
There are many ways to lose a home, but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest.
For owners who can no longer afford to keep mortgage payments current, there are alternatives.
One option is called a "short sale." When lenders agree to a short sale it means the lender is accepting less than the total amount due.
Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose. Also, not all sellers or all properties qualify for short sales.
Your first step should be to call the lender.
Be prepared to make several calls before you find the person responsible for handling short sales.
Next, submit a letter of authorization.
Lenders typically do not want to disclose any of your personal information without written authorization to do so.
Lenders will also want to know if you have savings accounts, money markets or anything of tangible value. So be prepared and have that information handy.
If everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies. But realize that the lender is under no obligation to accommodate this request.
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