|A preforeclosure short sale will stop foreclosure|
The Lender is often willing to agree to this arrangement if they believe they will be unable to liquidate the property through a foreclosure because the amount of the loan is simply higher than the estimated current home value. In such a scenario the lender is able to obtain a cash sum that is reasonable for today’s current prices and also able to avoid the extra time and expense that takes place during the foreclosure process. This is especially common in those states that have longer and more complicated and thus more costly foreclosure processes.
Such an agreement is ideal for homeowners who cannot afford their monthly mortgage payments even if they were to be reasonably modified by the lender. For these homeowners this type of short sale allows them to get rid of the loan and avoid the credit damage that comes with the foreclosure process. They are able become free and clear of any financial obligation to the lender and start a new. Further, they are often able to obtain thousands of dollars in financial aid as foreclosure relocation assistance commonly known as a Cash for Keys program that is an available option offered by many lenders and government help programs.
This agreement will obviously be agreeable to any homebuyer who believes the offered discount to be a good deal. They are able to save some money if they have the patience to deal with the extra party involved in the transaction. These deals can take a long time and often buyers will put in a lot of effort and time just to find out that the deal will never go through months later.
Homeowner Steps to a Successful Preforeclosure Short Sale
Be sure to contact the lender as early as possible and obviously before the foreclosure process is started.
- Write and submit a mortgage hardship letter.
- Devise a plan that makes sense for all parties especially the lender as they have to agree to this deal before it is even a possibility.
- The lender will no doubt have some requests before they give the final ok to find a buyer. They will need information on current market prices and other specific property info. You will most likely have to collect and submit this info in a timely fashion to your lender for their approval.
- Negotiate the final terms with the loss mitigation department.
- Find a buyer. Often the lender is able to help with this.
- Close on the preforeclosure short sale transaction.
- This is a great home loan solution for those homeowners who need mortgage help to avoid foreclosure and cannot afford to keep their home.