A Short Sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. A Short Sale often occurs when a borrower cannot pay the mortgage loan on their property, and after proving hardship, the lender approves a short sale. Both parties consent to the Short Sale process because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. Banks agree to a short sale to incur a smaller financial loss than a foreclosure or continued non-payment would entail.
- Avoiding Foreclosure on your credit.
- Living in the property until it sells.
- Appearing more responsible to future creditors, by helping the bank recover their loss.
- There is absolutely no upfront money coming out of your pocket to list your property with us.
After becoming more than three months delinquent on your mortgage payments, the lender can start the foreclosure process. To prevent foreclosure, the lender and the borrower can make an agreement called “forbearance”. According to this agreement, the lender delays the right to exercise foreclosure if the borrower can catch up with the payment schedule in a certain time. This period and the payment plan depend on the details of the agreement that are accepted by both parties.
A Loan Modification is a permanent change in one or more of the terms of a borrower’s existing loan. This allows the loan to be reinstated, and results in a payment the borrower can actually afford.
Payments may be lowered by:
- Lowering Interest Rates
- Reducing the Principal Balance
- Extending the Loan Term
- A Combination of all the above.
Deed in Lieu of Foreclosure
A Deed in Lieu of Foreclosure is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender). This satisfies a loan that is in default and avoids foreclosure. With a Deed in lieu of foreclosure you surrender your property to the lender due to your inability to pay the mortgage. The lender will then sell the property to retrieve a part or whole of the loan balance you owe.
The Foreclosure alternatives provided on this website are strictly for informational purposes. First World Realty Group do not partake in Forbearance, Loan Modification or Deed in Lieu of Foreclosure.Click here for further assistance