Short Sales – Fast Track to Resolving Potential Foreclosures!

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Finding yourself close to foreclosure can be a terrible reality and hard thing to admit. As soon as that reality sets in it touches off a tornado that sometimes can cause people to become lost and disoriented and cause breakdown and shutdown.

Most people are under the impression that short sales are an instant option, but there are many things that must be true before short selling is really a possible option.

The home value must have dropped from its original price. The home needs to have depreciated in value and in today’s market and current conditions; this is a factor for a good many people.

If you have recently fallen on hard times and cannot meet your current financial obligations. Things like lose of job, lose of hours, work shortages, and even sickness or lose of ability to work can lead to unavoidable financial repercussions. If these issues are going to affect your ability to pay your mortgage, you need to immediately inform your lender and write a letter of hardship explaining the situation. According to many leading mortgage lenders, some of the most common and acceptable forms of hardship are unemployment, medical emergencies, Bankruptcy, Divorce, or Death.

When you are contemplating ways to avoid foreclosure, and short selling being a potential resolution, you must first personally ensure that you are doing it for the right reasons. Making bad decisions, changing your living arrangements, poor money management, and poor neighbourhood are not “hardships”, and crying wolf in this way will cause potential situations in the future to be overlooked by your lender as they may just assume you are trying to weasel your way out of commitment once again.

Short sales previously were very rarely considered by lenders because of the loss of money. With the recent severe downward spiral of the housing market and the rapid rise of foreclosures and just general money lose across the board, lenders are eager to get back as much of the loan as possible. Something is better than nothing in their eyes.

When you are advised on the effects of short sales on credit, you must realize that it does in fact impact your credit score. While not as much as a foreclosure affects it, it still causes a dent in it. Do not buy into the myth that a short sale leaves your completely unmarked. Be sure you have all your information in order and do not fall for some of the tactics some real estate agents may employ just to get the commission from selling your house while not being concerned about you!