In our current market, more and more people are put in the position of having to sell their home, but not having enough equity to do it.  And for a variety of reasons they face the financial burden of holding onto a home that they either can't afford anymore (i.e. Adjustable Rate Mortgage increased) or no longer live in (i.e. job relocation.) 

If you're facing this situation, it can seem like you have few good options.  You can't afford the payments, but if you don't make them, the bank will foreclose.  And if you don't know your options, it can get pretty bleak pretty fast.  You could probably use some help putting out this small fire before it becomes a bit of an inferno.

We're here to help! 

Fortunately you have some alternatives to foreclosure:

1.  Eliminate Unnecessary Bills

Take a good look at your monthly budget and see where you can tighten your belt.  You might be able to trim back on entertainment expenses, like going on a hike or cooking at home instead of eating out or going to the movies.  Do you have excessively high car payments?  If you own the car, you may consider selling it and downsizing to a cheaper model (with better gas mileage.) 

Once you've given your monthly budget a good scrubbing, you'll know for sure whether you can really afford your mortgage payments.  If you can't or if you see that it's gonna be a losing battle because you expect your expense to increase, then checkout the next option.

2.  Ask for a Loan Modification

Banks aren't in the business of owning real estate.  Sometimes they will work with you to ease your monthly payment.  When you start to have difficulty keeping up, give them a call and ask if they can modify your loan.  When the market was in full swing, banks didn't really advertise this as an option, but they've been doing programs like this for a long time.  Nowadays some banks will even write sellers directly advising them to consider a loan modification. 

If you try this path, be aware that it may take some time to fill out the paperwork and get an answer, but in any case it doesn't hurt to ask.  Also, FYI...if you're already behind on your payments, then anything you tell them can be used to help the bank collect the delinquent amount.  Your conversations and documents will be filed in your account and can be pulled for later use.  If the bank denies your request, or the new payment would still be too high, the next step is to look at a doing short sale.

3.  Sell Your Home as a Short Sale

This is where you sell your home for less than it's worth and ask the bank to forgive the difference.  Believe it or not, there are a lot of Colorado Springs Short Sales on the market right now.  That's because banks are actually approving a lot of them.  In fact, some lenders even advise homeowners to find someone that can help them do a short sale. 

If you're pursuing this option, be sure to find a Colorado Springs Short Sale Expert.  These type of sales require a lot of paperwork and hours spent on the phone negotiating with your bank.  Each one is different and comes with it's own challenges (even for the experts.) There are a few tricks to the trade, such as the right stacking order for your short sale package, how to work with the loss mitigation reps and the right escalation tactics (and more importantly when to use them.)

If you'd like to learn more about Colorado Springs Short Sales, you can read the following series:

Short Sales in Colorado Springs and El Paso County Part 1 - What is a Short Sale?

Short Sales in Colorado Springs and El Paso County Part 2 - Do You Qualify?

Short Sales in Colorado Springs and El Paso County Part 3 - Pros and Cons

Short Sales in Colorado Springs and El Paso County Part 4 - The Short Sale Process

Contact me if you'd like to find out whether you might qualify for a short sale or want to list your home with a Colorado Springs Short Sale Expert.

Jamie Mades, REALTOR
Keller Williams Clients Choice
Office: (719) 535-0355
Direct: (719) 322-4645

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Jamie is a Colorado Springs Short Sale Expert and specializes in residential Colorado Springs real estate and Colorado Springs Military Relocations, providing buyer and seller services for Peterson AFB real estate, Fort Carson real estate, Schriever AFB real estate and Air Force Academy real estate.

"The Expert You Know & Trust"