| Taking steps now to avoid foreclosure could help homeowners divert financial trauma. We have all heard about the misfortunes of people that bought into the ARM hype during the housing bubble. Currently, many of these people are finding that they cannot keep up with their house payments now that the introductory period of their loan is over. The concept of a short sale is fast becoming more popular for distressed home owners. Buyers find the idea very attractive because they can usually by a property at a discount. Initiating a short sale could help some individuals minimize their damage. Home buyers may be convinced by greedy lenders that they can afford more home than they actually can in the hopes that they will foreclose. Other examples of predatory lending can come after a homeowner is in distress. Beware of lenders who offer to re-finance repeatedly, or loans that are for more than the house is worth. Whenever possible, engage legal counsel. ?The threat of foreclosure comes fast and hard for many homeowners who experience adverse personal circumstances. Loss of employment, tax liens, divorce or illness can all be contributing factors that lead up to foreclosure. A factor that may determine your eligibility to conduct a short sale is the level of communication with the lender. Banks are more likely to work with debtors that are a few months behind with problematic issues that impact their ability to pay than debtors that appear to have simply given up. Lenders also have an obligation to their guarantors to mitigate their losses and they want to maintain a positive public image. So, it is in their best interest to work with you to resolve the problem. ?If all else fails, a short sale could be the best option. It is even a possibility to retain any equity you may have accumulated. Be prepared to present your lender with payroll stubs, tax returns, bank statements, a recent credit report and any applicable medical bills or divorce decrees. ?Your lender will need to examine these documents in order to come to a decision. If you are approved for this measure, you still need to find a qualified buyer for your property. Part of the stipulation for approving a short sale may be the use of a real estate agent who has experience with short sales. Be cautious when dealing with a buyer. Make sure they are genuinely capable of purchasing your home. There are some real estate scammers who are ready and willing to take advantage of your distressed situation. In conclusion, don't let this experience deter you from buying another home in the future. By initiating a short sale, you have minimized the damage to your credit rating. Remember that you are not alone in this experience. Plenty of homeowners are feeling the sting of the housing hype. Home ownership is the American dream. You can recover and repair damage to your credit and be ready to buy at another time. |
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