Help Stop Foreclosure

Short Sale Tips: Working With your Lender to Avoid Foreclosure

A Short Sale Can Stop Home Foreclosure & Save Your Credit

Nothing is as detrimental to your credit rating as late mortgage payments and foreclosures. If you have fallen behind on your mortgage payments and are facing home foreclosure, you should consider using a short sale to sell your home now and avoid foreclosure.

One of the most common questions that homeowners ask is, “can I still sell my home if I am in foreclosure?” A Short Sale is simply selling your property for less than what is owed with the permission of your mortgage lender. It is not as complicated as many foreclosure advice experts make it sound, and is one of the best forms of foreclosure help available. There are three steps to closing a short sale: short sale pre-qualification, marketing the property, and closing the short sale.

The first step, short sale pre-qualification, is when you contact your lender and explain that your financial situation has changed and you wish to avoid foreclosure by selling your home. Most lenders have a short sale application that can be faxed or emailed. The application will tell you what documents you will need to gather and submit to your lender in order for them to determine if a short sale is an option. Common documents include paycheck stubs, tax returns, hardship letter, and bank statements. These items show your lender that you are not in a position to repay the loan.

Once your file has been pre-qualified for a short sale, you will market the property to find a qualified buyer. This means hiring a realtor and, if you can afford it, advertising your property in your local newspaper or other real estate publications. Remember, you are not trying to profit from the sale or cover what is owed to your lender. You are simply trying to stop home foreclosure and avoid have a foreclosure on your credit history by helping your lender recover as much of the money they loaned you as possible. It is also important to remember that the foreclosure process can be quite lengthy in some states, so don’t give up using a short sale to avoid foreclosure just because you do not find a buyer immediately.

Lastly, once you have found a qualified buyer, you will submit your purchase contract and the buyer’s credentials (pre-approval letter or proof of funds to close) to your lender. If your lender accepts the offer, then the deal is sent to a title company who will facilitate the closing of escrow. It is also important to order any city of point of sale inspections or other inspections as to avoid delaying your buyer from closing on time.

Once you have completed these steps, you will have stopped home foreclosure and your credit rating will be much better, in most cases, than if you had simply done nothing and lost your home through the foreclosure process. A short sale is a great option to anyone trying to avoid foreclosure.

About the Author

This article was submitted by the Loss Mitigation staff of ILMG. We offer free short sale advice and can
help you avoid foreclosure today!

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Can a conversation help stop foreclosure? It certainly can! It can make the difference between staying in your home and losing everything. If you say – help me stop foreclosure – I say talk to your lender! I’m sure the very idea of calling them is terrifying. You are not alone. To help avoid foreclosure on your home, work with your lender, to reach a mutually agreeable arrangement that will help you remain in your home. Margo, my neighbor, who was mentioned in a previous post, only contacted her lender by mail, a slow, tedious and often unproductive method. She may well have been able to remain in her home, thereby retaining her equity, if she had only attempted to negotiate with her lender. The following suggestions are just some considerations you must look at before making that all important call to help save your home from the onset of foreclosure.

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1. Prepare a file that is just for your mortgage documents. Organize the file with any documentation concerning your home loan. Make sure the file is neat and that it’s easy for you to locate any document quickly while on the phone with the lender.
2. Get a note pad that is also used only for you mortgage account. Use the note pad to write down any information that was not given to you in written form that pertains to your loan. Make notes during and after each conversation with your lender. Be sure to include the date, the time, who you spoke with, and what the details of the conversation. Also, use the note pad to jot down any questions you think might be beneficial to help stop foreclosure on your home. Just like going to the doctor, we have lots of questions to ask before we get there. Then, while sitting in the office, we can’t even remember one of them!
3. Take the time to familiarize yourself with all the documents in your file, from your original loan papers, to any other letters you have received pertaining to your mortgage. This way you know exactly the terms of your obligation as well as where the lender stands so far in the process before you make phone contact with them.
4. If you have not been exposed to the terms of the “help stop foreclosure” world, do your research ahead of time to familiarize yourself with the options available to you today. Prepare yourself to come to the conversation with your lender armed with a reasonable plan to help get you out of the foreclosure process. Be educated about what is a viable plan that would benefit both you and the lender, so they will seriously consider your proposal.
5. Be honest with them about how you came to be in this financial situation. Again, you must prepare yourself. They will not simply take your word for it; you must provide written documentation to back up your story. Gather and organize all these papers before making that first phone call.
6. I recognize that actually making the call will be the scariest part of this whole process. Have a trusted friend or family member by your side if this will give you comfort and confidence. Be calm and courteous when you call. Always remain polite, even when they are not. If you are unsatisfied or frustrated with their representative, call back and try to get a different person on the phone.
7. When they request information from you, and they will, your response should be swift, thorough, and professional, if you have done a good job with the mortgage file you established as outlined above. This simple step could be the entire difference between your file getting noticed and being placed on the bottom of the pile. And that will be the difference between avoiding foreclosure and losing your home.
8. Express your gratitude as frequently as you can to anyone assisting you. A simple thank you goes a very long way in the business world. It is not said often enough.

Help stop foreclosure on your home by conversing with your lender in an educated, polite, and thankful way. The power to avoid foreclosure all together could truly be within your hands if you are careful and thoughtful about how to proceed from this point forward. Don’t be a Margo. Educate yourself and be brave! Make that phone call, after you have gotten all the facts, of course, and be the one that was able to avoid foreclosure all be yourself by using the knowledge you found.

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