Leslie Wilson – Realtor

If you are losing your home through foreclosure and you want a way to both pay off  your mortgage and save your credit, consider doing what is called a “short sale.”  A successful short sale is a viable option for people who find themselves in a position where they are unable to pay their monthly mortgage payments and can’t or don’t want to file bankruptcy.

By selling their home in a short sale, the home owner’s credit stays in tack because the mortgage debt is satisfied.  Simply put, a short sale means that the company that has financed the purchase of your home  agrees to a mortgage payoff that is less than the money you owe on the house.

How a Short Sale Works

In general, a short sale works the following way:

• Rather than lose his/her home through foreclosure, the distressed homeowner contacts a short sale specialist to help find a buyer for the house.  The house is listed at a price that is less than what you owe on the house.
• Once the agent finds a buyer, the lender who holds the mortgage on the house is contacted with the offer.
• When the mortgage holder agrees to the reduced sales price, the distressed homeowner’s  mortgage company is paid and  the deed to the house is delivered to the new home owner .

In the past, during a time of stable house inventories and a stable national economy, many mortgage lenders rejected a distressed home owner’s request for a short sale. These companies vigorously pursued foreclosure  preferring instead  to sell the house  at auction for maximum profit. Today, however:

…. Nationally, between November and February, 17 percent of all home sales were short sales, up from 12 percent in the preceding six months.  For the first time since the crisis began, the percentage of short sales exceeded the percentage of foreclosed-property sales, according to a survey from market researcher Campbell/Insider Mortgage Financial.

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