When individuals have a hard time paying their monthly mortgage payments, they fear that foreclosure may be an inevitable occurrence. This is not always the case as there are a few different options which homeowners may be able to take advantage of without having to succumb to foreclosure. One such option is known as a Short Sale and this is a beneficial item to have knowledge of, especially when facing hardship with regard to paying the monthly mortgage bill.

What is a Short Sale?

A short sale is when the homeowner can sell the home for less than what it is worth and what may be owed to the lender in the way of the mortgage loan. The lender in turn will take the amount in which the home is sold for, even though the lender may still be owed more money from the borrower. The lender will forego any other amount of money that may be owed and basically cut its losses then and there.

Reasons Why the Lender May Agree to a Short Sale

There are a few different reasons why the lender may choose to accept the borrowerís offer of a short sale. The first is to receive some form of money back in as quick a manner as possible. Since foreclosure proceedings may take quite a bit of time to complete, by accepting the short sale offer, the lender is getting some form of payment much more quickly than they may have had they not allowed the borrower to engage in a short sale.

Another reason why the lender may accept a short sale offer from time to time deals with the added fees that they would see in foreclosure proceedings. With proceedings such as those, the lender can expect to pay attorneys fees and other associated costs which will only increase the amount expended and they may not even get the full price for the home in foreclosure proceedings which makes accepting a short sale a viable option for the lender.

Why a Short Sale is a Beneficial Option for the Borrower?

The short sale may not only benefit the lender but the borrower as well. By proceeding with a short sale, the property owner is cutting their losses as well by selling the home and not having to pay any further amount of money to the lender. This will enable the homeowner to move on and obtain housing which may be more within their price range. It is important to note however that although the homeowner is getting out of the mortgage, they will no longer own the home and lose any money expended towards the home in the past.

In addition, a borrower may find that a short sale is a good option as they will not have to go through any type of foreclosure proceedings. This will protect their credit in the long run as well as prevent them from the hassle involved with a legal proceeding of this type.

Short Sale Information

A short sale is an alternative to foreclosure which may benefit both lender and borrower alike. The lender is getting paid back much of the money which it lent to the borrower as well as getting rid of the property. As for the borrower, that individual is getting out of their mortgage without having to go through foreclosure proceedings or expend any more money towards the home.

Why Sell Before Foreclosure?
Foreclosure is one of those scary processes that most of us feel powerless to control, but there is one thing that you can do to stop from being foreclosed on. While a tired and stressed homeowner may think that it really doesnít matter if they sell or get foreclosed on, it does! Foreclosure is not a good thing, but if you live in a great house, in a great market, and you know you can sell your home, why not go for it? Selling is almost always a better way to go than allowing the whole foreclosure process to take place. Foreclosure can have long lasting and devastating repercussions, so why not sell if you can?

Great Reasons To Sell Your Home Before Foreclosure
What many people do not realize when they are being foreclosed on is that a sales contract will stop the foreclosure process right in its tracks. The thing that homeowners need to understand is that the bank just wants their money. If you put your home up for sale and you get a sales contract the morning of a public auction, all bids are put on hold and your home will not be sold to anyone at the auction. This is a great way to get the bank their money without the hassle and embarrassment of going through a foreclosure. Even the least proud person finds some embarrassment in having their home foreclosed on, but you donít have to experience this. You can just tell friends, family, and neighbors that you think itís time to move, they donít need to know anything about your financial situation.

Another great reason to sell your home before it is foreclosed on is that you can sell it for the market value. What does this mean?
For most people this means that they will not only pay the bank back, but also they will be able to pocket some money as well. Not only will this keep you from going through the foreclosure process, it will help you get back on your feet and maybe even have a down payment for a new home. Who knew that a looming foreclosure could actually help you sell the home that you are in now and get a new one?

One of the most important reasons that you should sell before you are foreclosed on is to protect your credit. As most people know, a foreclosure on your credit is one of the worst things that can happen to you. While you may still be able to buy a home and a car, you should expect to have to pay large down payments and youíll also deal with very high interest rates. Those with a foreclosure on their credit often have a difficult time getting major credit cards with decent rates, let alone home and car loans that are usually more substantial in size than your standard credit card. The great thing about selling before you are foreclosed on is that a creditor will never be able to tell that you were about to be foreclosed on. You wonít have a hard time getting another mortgage because while you may have a couple of delinquent payments, you do not have a foreclosure which is the big black mark where mortgages and car loans are concerned.

Another awesome reason to sell before your home is foreclosed on is that you wonít be required to leave any time soon, if you work out a contract with the buyer. In many states you may be required to leave the home within 72 hours after the highest bidder at an auction won it.

Itís not uncommon for sales contracts to give the seller 30 or even 60 days to move out of the home, and this will give you awhile to get packed up, pool your resources, and sort of start over.

How To Sell Your Home Quickly
The great thing is that foreclosure doesnít happen over night. The whole process often takes six months to a year, so you will know that it is coming and you can put your house on the market the moment you realize that you will not be able to satisfy the loan. Putting your home on the market and working with a realtor is probably your best bet because they can bring more traffic to your home and hopefully sell it sooner rather than later. Make sure that there are foreclosure notices in the local papers, as this will bring the investors out of the woodwork. You may not make as much through these investors, but they can give you the cash you need to get out of debt now, instead of compromising your credit with a foreclosure. Luckily, there are many investors and firms that specialize in buying houses that are on the brink of foreclosure, or houses that people just need to sell now for whatever reason. These investors and firms can usually meet with you and purchase your house in less than a week, which means you can decide long before the foreclosure process is in full swing that you just need to sell and get out of the debt altogether and start over.

As you can see, selling is almost always a better idea than allowing foreclosure to be an option. Selling your home will have short-term repercussions because youíll have to find a new home, but foreclosure will affect your credit for at least the next seven years, but itís often a lot longer. Anyway you look at it, selling is just a better option if you care about your credit at all. And, we all care about our credit because our credit is our buying power, and in a day in age where credit is more common than cash, we all need to protect our credit and our buying power as much as possible. Foreclosure is avoidable, so put up the for sale sign sooner rather than later so you just donít have to go through the stress and the hassle of foreclosure.

Will I Know If My Home Is Being Foreclosed On ?
If you are in financial trouble and you are worried that your home will be foreclosed on, take a deep breath. While foreclosure is very serious and something that you shouldnít ignore, it is something that can be reversed and dealt with. Banks do not want to foreclose homes; it means a loss of money to them as well as a lengthy legal process that they honestly just do not want to deal with. A foreclosure doesnít happen over night and typically does not happen when you are late on a payment or are a month behind for a couple of months. Generally, your mortgage holder understands when you have to make a late payment every now and again. Generally speaking, the majority of people have a late mortgage payment from time to time, but this does not mean that they will be foreclosed on or anywhere near it.

Will I Know?

There is no doubt that you will know if your home is being foreclosed on. Unless you donít open your mail and you never answer you telephone or check your messages, there is no way for you not to know that your home is being foreclosed on. As was stated above, banks do not want to foreclose on a home. The bottom line is that a bank has a better chance of recovering the debt from the current owner than it has a chance of not losing money throughout the foreclosure process. Banks are not in the business of foreclosing mortgages; they are in the business of loaning money. Therefore, the bank does not want to foreclose on your home and will make every possible effort to notify that they need your help to work through your delinquent payment issues. Youíll likely receive notices in the mail, some which are registered or certified so that the bank is sure you got them. The bank will also call you at home as well as at work and every other number that they have in attempt to make some sort of payment arrangement with you to reconcile the debt.

While you might get what seem like threatening letters, the bank just wants you to get in contact with them and let them know what is going on. These threatening letters are an attempt by the bank to make you get in touch with them, not simply to call and tell you that they are taking the house away from you. If you are worried about being yelled at by someone on the other end of the phone, remember that they are simply calling to try to work with you.

If you donít respond to these calls and letters, within a few weeks or few months the foreclosure process will commence. The first thing the bank will do is send you yet another letter to let you know that they have begun the foreclosure process. Again, unless you simply do not read your mail, youíll know that the process has officially begun. Around this time you might start getting even more mail and you wonít be able to deny what is happening. You might get letters from lawyers encouraging you to file for bankruptcy to save your home, you might get letters from investors wanting to buy your house from you before the bank forecloses. You might walk out to your mailbox every day of the week and find it stuffed full of correspondences from your lender, investors, and lawyers. All of these people want to help you, so you will definitely know what is going on. With so many attempted correspondences, it will be hard if not impossible to deny what is going on. You donít simply wake up one day and find that your home is being foreclosed on. So, call the bank and make some payment arrangements with them, file for bankruptcy, or even sell your home so that you donít have the foreclosure on your record. The thing is, foreclosure doesnít happen fast so youíll have time to do any of these things.

Is It Too Late?

Itís never too late to stop a foreclosure once it stops. If youíve been avoiding all the letters and the calls, you can still stop foreclosure in its tracks. Often youíll have to make a big payment to satisfy the bank, but many times you just need to call and let the bank know what is going on and set up payment arrangements. The goal is to bring your loan current, and if you can do that in the next three to six months youíll probably find that your bank will work with you. If the bank is no longer willing to work with you, you can always show up at the foreclosure auction and bid on your own home. The deposit for a bid is usually about $5,000, so if you have this and feel as though you can finance the home within 30 days you can always go this route.

Itís important to note that if you do bid on your home and win it at a foreclosure auction some old debts that were attached to the property may be reinstated when you take ownership of the house again. Either way, buying your home back at a foreclosure auction is a great way to get off to the right start again as well as keep your home. The great thing is that you can continue living in your home this whole time, so you arenít suddenly without a home if your home does get foreclosed on.

The bottom line is that your home cannot be foreclosed on without your knowledge. You will have plenty of notice from your bank, along with your personal knowledge that you havenít been making timely or adequate mortgage payments. Thankfully, the bank doesnít want to foreclose on your home, so you can stop the process, and there is no doubt that it canít happen unless you are aware.

Understanding the Foreclosure Process

It is important to remember that when you have questions about the foreclosure process that the laws differ from state to state. What might commonly be done in one state might be illegal in another. If you are involved in a foreclosure at the present time, you would be well advised to consult an attorney about what you should expect since every state has a fairly unique foreclosure process. If you are simply looking for general information, you will find everything you need to know about the foreclosure process right here. Foreclosure is a stressful process for all parties involved, but if you understand the process you might be able to lessen the stress and even stop the process before the house is sold.

Leading up to the foreclosure

First, the customer will miss mortgage payments and the bank will send late notices. When the customer still does not make a mortgage payment, the bank will attempt to contact the customer in writing as well as by phone to resolve the missed payments and see if they canít get things back on track. If no arrangements can be made and the customer continues to miss their payments, the bank will demand payment under the note in full based on an acceleration clause. Once the acceleration clause is put into effect the bank is allowed to demand the full amount of your mortgage be paid immediately because you did not live up to your end of the deal. Once this stage has been reached the bank simply will not accept monthly payments from you, but may accept a considerable amount such as three to six months worth of mortgage payments to reinstate the loan. If no payment arrangements are made between the customer and the bank, the situation progresses into the formal foreclosure process and itís a good time to hire a lawyer.

Formal Foreclosure Process

The bank will send a notice of foreclosure to the residents of the home, usually by sheriff or another court official. The bank will then begin filing papers with the court to get the ball rolling in a legal way. Legal notices will also appear in newspapers stating that the home will be foreclosed on in most areas. If no payments are made with the lender, notice and waiting periods will officially expire letting the lender know that there is no way to reverse the foreclosure process. The court will then process the paperwork and will hold hearings regarding the banks claims, and the court will issue an order allowing the bank to foreclose on the home. Most lenders will quicken the pace by posting the notices in newspapers and appearing in court at the same time, drastically shortening the length of time it actually takes to foreclose on a home. After the court issues an order for foreclosure notices and ads will appear for a foreclosure sale in local papers to help the bank sell the home before any more time or money is lost. If there are no payment arrangements made or settlements reached with the customer and the bank by this time, the home will then be sold at auction to the highest bidder or it will be put up for sale by a realtor.

The length of time that it takes for a home to be foreclosed on is usually six months or more, although this can differ from state to state. Because the bank does not want a home to be foreclosed on and would prefer that payment arrangements be made, the process is often put off. The length of time will also depend on how aggressively the mortgage holder pursues your case. Luckily, you do not have to move out of your house during the foreclosure process. Because the process takes awhile and the bank will consistently be trying to reconcile with you, you wonít have to leave.

When the home is sold at auction, you automatically become a tenant of the home that has been foreclosed on. The new owner must then take legal action to have you evicted. The new owner can immediately give you a 72 hour eviction notice, and if you fail to respond he or she must take the matter up in court. If a judge files against you, youíll have ten days to appeal, but if you are unwilling to pay rent and the foreclosure was open and shut, the judge is not likely to rule in your favor. In all, it could be more than a year before you are actually forced to leave the home that has been foreclosed on. The judge can order you to be moved out of the home and give you as little as 48 hours to move your belongings out of the home. If you leave anything in the home the Sheriff will take it into custody and youíll have to pay fees to get the items back. If you fail to move after the judge has handed down the order, you can be arrested. The whole eviction process can take anywhere from six weeks to six months, with the average case taking about a month and a half.

The thing that many people donít understand about the foreclosure process is that it never has to be out of your hands. You can almost always turn the situation around by showing the bank or mortgage holder that you want reconcile the debt. If you are willing to make payments and talk to your bank about the missed payments, youíll generally find that they want to work with you. It costs a bank time and money to foreclose on a home, so they really want you to step up and start paying on your home again. This is a good thing, because even if you feel as though you canít possibly get on top of your mortgage again, all hope is not lost. Foreclosure is a big deal, but not something that you canít get a hold on.

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