The nationwide real estate market is undergoing a severe correction, and short sales and foreclosures are at historic
levels. Many people are in the process of losing their homes and investment properties. Should you find yourself facing
this situation, below are suggestions that may help you. Note: This information is not meant to be legal
advice. Consult a real estate attorney and/or tax professional for more information, but in all cases contact your
lender immediately.
1. Don't be in denial...many are in this same situation. Contact your lender immediately if you
are unable to make your payments or are already behind to see if they'll make payment arrangements or add the unpaid
payments to the end of your loan. No contact with your lender(s) is the worst thing you can do!
2. Consider listing your property for sale and/or for rent. Talk with your real estate agent about the possibilities.
3.
Short Sale - A short sale is a real estate transaction in which you sell your property
at a price that is less than what you owe the lender(s). This is better than having a foreclosure on your credit
report. A short sale must be approved by your lender(s), i.e., first mortgage holder, second mortgage
holder, etc. There are tax consequences that go along with this procedure. See
http://www.legalwiz.com/articles/shortsale.htm .
4.
Deed In Lieu of Foreclosure - This is an instrument used to convey your property back to
the bank...in other words, you give your property back to the bank. This too is better than having a foreclosure on your
credit report. This transaction must be approved by the bank. Call your lender to start the process. Visit
http://en.wikipedia.org/wiki/Deed_in_lieu_of_foreclosure .
5.
Foreclosure - This process occurs when you stop making mortgage payments and the property eventually
goes to auction and is sold to the highest bidder through a Trustee's Sale. If there is no bidder at the Trustee's Sale, the
property goes back to the bank. Please be aware that if you have a second mortgage on your home and you stop making payments,
they too can foreclose on your property even before the first mortgage. Your Home Owners Association can also foreclose for
unpaid dues, fees, fines, etc. Find a rental property as soon as possible before the Trustee's Sale and a notice is put on
the door to vacate. Bankruptcy can stop a foreclosure. See
http://en.wikipedia.org/wiki/Foreclosure .
6. Bankruptcy - Consult a bankruptcy attorney to determine how this may help save your home.
HELPFUL LINKS
Realtors® Applaud House Passage of Mortgage Cancellation Tax Relief
http://www.bankrate.com/brm/news/mtg/20001019.asp
http://www.realtor.org/home_buyers_and_sellers/protect_your_home.html
Buying Foreclosures
