Saving Your Home from Foreclosure Part 2

A couple of weeks ago, I published a post on how to save your home from foreclosure. I had three steps but really, we only covered steps 1 and 2 in the earlier post.

1. Do your homework: make sure you have all of your loan documentation and understand the terminology
2. Call your lender: there are a number of programs, including Making Home Affordable, that your lender may have available to help you

Number 3: If all else fails, you may have to sell your home

Selling your home in a good market used to take about 90 days. Today the market reflects a trend of 6 - 12 months... But what if you can't afford your home anymore? What options do you have available to you to avoid foreclosure? One option is a short-sale.

Unfortunately, steps # 1 and # 2 may work to prove that you really can't afford your home anymore. In part 2 of this post, we will explore "short sales." A short sale is basically when you work with a realtor to sell your home for what you owe on the mortgage. The bank has to approve the sale. It's up to the bank whether or not they will allow you to sell your home for less than what is owed on the mortgage. This still will negatively impact your credit but not nearly as bad as a foreclosure. How your credit is affected depends primarily on how / if the mortgage lender reports the sale of your home and thus the repayment of the loan (mortgage).

There are a lot of variables when it comes to making the decision to sell your home. It's best to seek expert advice. Here are a few resources to become more familiar with the concept and the process of a short sale:


Video from CNN Money

Video from CBS News

About.com article on Short Sales

List of articles on Short Sales and understanding Foreclosures available on About.com

What Happens in a Short Sale When You Have Two Loans?


As a real estate agent, I've worked with a few clients who've successfully sold their home via the short sale process. If you think this option is a solution for you, contact me and let's talk about it.