Real estate values have substantially dropped in recent times leaving many homeowners in shock to find that they are under water on their home. For so many years, home prices climbed consistently, either modestly or substantially. What a bombshell to learn that this isn't always the case. |
Homeowners who purchased a home in the last few years near the top of the bubble have met with the unpleasant reality that even though they've been religiously paying their mortgage payments, they now owe more than the outstanding balance on their loans.
The good news is the market will assuredly recover, as it always does. The bad news is that we have no idea when. For those deep under water, it will take quite some time. In case of a job loss, relocation or any other reason to want to sell one's home, it's hard to get out of an existing mortgage. One way to get out is with a short sale.
A short sale is a method of paying off your loan rather than just defaulting on it. In the case of a short sale, the homeowner contacts their lender in an attempt to negotiate a price for their home that is less than the balance owed. Many lenders, these days, are willing to entertain the idea of reducing a loan balance rather than risk a foreclosure. A foreclosure is an unfortunate last resort for both the homeowner and the bank.
The first step in accomplishing a short sale entails the homeowner contacting their mortgage company. It is best to speak to a manager or supervisor of the "at risk" loan department. Making a telephone call or going to the lender in person will be more effective than an email or letter. After speaking with the appropriate person, follow up with a letter. Make a file marked "short sale" and keep a copy of all correspondence. You will also need to write a letter stating what hardships have brought you to need to try this tactic.
Gather market analyses of various properties that have sold in your area in order to support your case. Many realtors now specialize in the short sale and it would be to your advantage to employ one. Realtors will have many contacts and much knowledge to help you release yourself from the deep waters of your mortgage.
Even though financial times are tough, there are ways to relieve the burden you are under. A short sale is one way to accomplish this in a way you'll feel good about.
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