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Real Estate & Finance News That Affects Your Home                                                                            Page  1 2 3 4

SEPTEMBER 2009 - PAGE 2

SELLING How To Avoid Foreclosure By Conducting A Short Sale Homeowners facing foreclosure may opt to sell their homes before they lose them. A pre-foreclosure sale is an effective way to minimize damage to your credit while getting out from under a mortgage you can no longer afford. The problem some homeowners face, however, is owing their lender more than their home is worth. In these situations -- known as being "under water" or "upside down" -- the homeowner is conducting a short sale. Because proceeds from the sale do not cover the amount owed on the mortgage, the homeowner/borrower would still have an outstanding debt to the lender unless the lender approves the short sale and forgives the remaining debt. Short sales are not for the "faint of heart," and here's why: Lenders rarely agree to short sales in advance -- most sellers must have a purchase offer in hand before asking for lender approval. Securing your lender's approval can be a detailed process requiring you to submit a variety of documents about your financial situation. The buyer must have the patience to wait, perhaps weeks or months, for your lender to approve the short sale. Only a very motivated buyer is likely to enter into such a transaction knowing that the deal could ultimately fall through. If you have more than one loan secured by your home, you will have to either pay off those other loans or negotiate with those lenders to release their liens so the short sale can proceed. Still, lenders agree to short sales every day. The best path to success is working with a real estate professional who thoroughly understands the process and can guide you through it. That's where we come in. We'll help you price your home appropriately, find a committed buyer for your short sale, help you negotiate with your lender and keep the short-sale process on track through closing/settlement. If you think a short sale could help you avoid foreclosure, call us to get the ball rolling! We'll arrange for your lender's loss-mitigation department to send a short-sale application or package immediately. Working together we'll get your home sold as quickly as possible. GETTING HELP Contact Your Lender At First Sign Of Trouble Many mortgage lenders today are willing to work with homeowners who fall behind on payments, offering them opportunities to repay the outstanding amount in a variety of ways -- revised payment plan, loan modification, refinancing, etc. It is often less expensive for a lender to help you keep your home than to go through foreclosure. The more temporary the problem, the more likely it is you can work something out. The important point is to contact your lender and explain your situation early -- before the lender initiates foreclosure -- to minimize damage to your credit and avoid incurring late fees and legal charges on top of your unpaid debt. In the event you cannot find a way to keep your home, conducting a pre-foreclosure sale may be your best alternative. Again, notify your lender of your intentions.                                                                                                                                                                                                            Page  1 2 3 4