If you are facing foreclosure and can no longer afford your home, you may qualify for a Short Sale—even if you don’t think you can (or haven’t been able to) sell your home.
“I want to avoid foreclosure, but I can’t sell my home for what I owe on my mortgage.
What can I do?”
What is a Short Sale?
A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a Short Sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds
A Short Sale is an alternative to foreclosure and may be an option if:
- You are ineligible to refinance or modify your mortgage
- You are facing a long-term hardship
- You are behind on your mortgage payments
- You owe more on your home than it’s worth
- You have not been able to sell your home at a price that covers what you still owe on your mortgage
- You can no longer afford your home and are ready or need to leave
What are the benefits of a Short Sale?
- Eliminate or reduce your mortgage debt
- Avoid the negative impact of foreclosure
- Start repairing your credit sooner than if you went through a foreclosure
What is the process for a Short Sale?
If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:
- set the sale price (based on current market value),
- collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
- review acceptable offers,
- agree to the terms of the sale once a buyer is in place, and
- work with the buyer’s real estate agent and mortgage lender to finalize the sale.
In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.
A Short Sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation.
|Gather your financial information—Make sure you have your basic financial and loan information on hand when you call your mortgage company. You’ll need:
|Explain your current situation—Be ready to outline your current hardship and explain why you are having trouble making your mortgage payment, the reasons why this is a long-term problem and inform your mortgage company that you want to sell your home to avoid foreclosure. Your mortgage company will need to understand the reasons why you are having difficulty in order to find the right solution for you.|
|Contact your mortgage company Tell them you are interested in a Short Sale and you want to see if you qualify.|
|Contact a licensed real estate agent—Tell them you are interested in listing your home for sale (if you have not already done so).|
Source by Fannie Mae/knowyouroptions.com