Too many homeowners allowed their lender to foreclose on their home before they exerted the effort to save that home and their most valuable asset. It may not have had to happen that way.
Over 70% of the homes that went to foreclosure in America in 2010, were never listed for sale by a real estate professional. What the homeowner missed was an opportunity to get good, objective counsel from someone who could help them reduce the trauma of the distressed mortgage circumstances, and the loss of value of the asset.
Owners of distressed properties are experiencing a wide range of emotions because of this unfortunate situation they are in, and it is probably overflowing to their personal life as well. Money matters usually do. It needs to be recognized and understood that their is a choice here, and the homeowner has an opportunity to be proactive earlier in their demise, and honestly seek a remedy to their problem.
As usual, the key word in all this is ACT! Real estate professionals who have trained to help distressed sellers, can take a lot of anxiety away by answering questions that the homeowner hasn't thought of yet. That is because they know what question need to be asked. Let them lead interference for you with your lender and help negotiate a short sale opportunity that can result in a transaction that will satisfy the needs of both parties.
A short sale is the sale of a property that falls short of the existing balance on the mortgage. You say, " I fall short of paying off the mortgage when I sell the home, won't I still have a legal claim or judgment against me for the balance"? Yes you could. But many times, if the transaction nets the lender enough that they can live with, and not have a property in their portfolio to manage by not having it sold, they will not pursue the deficiency. You will have a settlement of debt in your credit report, that lives for two years, as opposed to a foreclosure that lives much longer.
The choice should be an obvious one, when and if you get in that situation. But it is a choice that needs to be made sooner than later. Call and competent real estate professional and get help, and get your home on the market for sale. Don't think you are going to help yourself by selling it yourself with a sign in your yard, and saving a broker fee. Look at the big picture.
How do you know it is time to make that call?
Do you want to stay in your home? Have you sought loan modification from your lender? How serious a hardship is the mortgage payment on your household? How many payments are you behind, if any? Have your received a registered default letter from your lender?
The most important thing to remember is, doing nothing will only make it worse. Don't let anger and frustration make you think you are "sticking it to the bank" by letting your home go to foreclosure.
Fannie Mae has released new details on its book of business, which contains the share of mortgages it owns or guarantees that are three or more months past due date steady decline for a year now.
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