When you enter a foreclosure process then you’ll be no longer eligible to make payment on your mortgage. Your property will be repossessed by the creditors and the credit report will be blemished for 10 years. Therefore, you can do a short sale in order to stop foreclosure. Short sale is a process through which you can sell a house lower than the existing mortgage balance. With the approval of the lender you sell the property at a loss to repay the creditors. In some cases, the lenders expect the borrower-in-default to be responsible for the difference between the loan amount and the sale amount. Generally, the creditor will allow you to conduct a short sale, if he is aware that you’ll not be able to pay back. Therefore, if you fail to make payment on your mortgage, then a short sale can be a viable option to stop foreclosure.
Here are a few ways to stop foreclosure by conducting a short sale:
1. You can approach the loss mitigation department of your mortgage company. Try to show that you are undergoing financial hardship and request consideration for a short sale. In order to begin the short sale proceedings then the representative will send the required documents.
2. You are required to complete the short sale application document. You need to submit copies of recent tax returns, W-2s, recent pay stubs, bank statements, proof of occupancy before beginning a short sale. You are required to provide monthly budget, an affidavit along with information that you’re undergoing financial crisis. You have to allow the company to access your information on your behalf to obtain tax returns, credit scores and other legal details. Some companies might compel you to provide hardship letter with a sketch of your present financial crisis and request for short sale.
3. You can hire the services of a licensed real estate agent who can help you sell your house. The agent will guide you to choose a price that will be fair according to the market valuation of the area where the house is located.
4. When you get an offer on the property ensure that the agent forwards it including the necessary documents to your loss mitigation representative. The mortgage company needs to approve the offer before you start a short sale. The short sale usually gets delayed because of low offers or liens on the property held by other financial institutions. These financial institutions are also need to agree to the offer before beginning of the short sale.
5. You are required to check the approval letter after your offer for short sale is approved on the property. When you do a short sale you are required to pay back the amount to the lender that falls short after a short sale. You can contact the loss mitigation expert in order to find more information regarding the process.
Therefore, if you do a short sale then you can manage to stop foreclosure on your property.