If you are having trouble meeting your monthly mortgage payments and you are trying to prevent foreclosure don’t wait until it is too late.  Foreclosure is not something that you or your lender want to go through.

Believe it or not there are alternatives.  You can try to get a forbearance from the lender or you can ask for a temporary reduction or suspension of of your monthly mortgage payment.  You could refinance your loan or you could sell your home and move to a lesser expensive apartment.  If these are not options you can do what is called a short sale.

When the supply of money and credit was easy to get lenders overextended and allowed buyers to get houses and mortgages they could afford to pay back.  The key at that time was “comfortably”.  Lenders made loans which homeowners could afford at the time but did not allow prepare them for the significant increases to come. These loans resulted in financial difficulties when a significant financial change occurred.

For example if you obtained an adjustable rate mortgage and your rate and payment goes up you may only have the option of selling your home because your income could not catch up with the increased monthly payment.  Unfortunately, many homeowners are in this situation and with today’s distressed prices and the length of time it takes to sell a home they need a quick solution to bail themselves out before foreclosure.

Given these circumstances you may be forced to sell your home at a distressed price.  This price may be that the proceeds from the sale may be less than the existing amount than your existing loan.  In this case we have what is called a short sale. This is where the approval of the lender would be required for the sale of the property and the transfer of the title to the property

This entry was posted on Saturday, March 21st, 2009 at 12:45 am and is filed under Foreclosure. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.