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Short sale option vs a foreclosure

August 26th, 2009 · 9 Comments · Uncategorized

The US Governments ‘Making Home Affordable‘ program assists with loan modification and loan refinancing options to keep you in your home. Go to http://www.makinghomeaffordable.gov/ for more information on this great program.

However, if you have tried the Making Home Affordable Program without success and you are in a situation where you are unable to make your mortgage payments, a short sale may be an option to avoid a foreclosure.

A short sale has some advantages over a foreclosure in that it minimizes the damaging impact to credit: Foreclosure can remain on your credit for up to seven years while a short sale usually gets reported as a “settled debt” and is significantly less damaging. With a short sale, your FICO score will not be as negatively impacted as it would be with a foreclosure.

Minimize financial exposure/liability: In many foreclosure situations, the lender will end up selling the property at a huge loss of money and time once they foreclose and repossess the property. The homeowner can be left financially liable to the lender. While the same may be true with a short sale, the difference is with a short sale the homeowner is still involved in the process and can therefore contribute their input and have more control over the sale price of the property and the potential associated liabilities. In a foreclosure, however, once the lender repossesses the property and the homeowner is typically defenseless with respect to what follows.

You can find more information on the short sale process at www.willfrost.com

Managing the short sale process is time consuming and a lot of work. If you are considering this option, give me a call at 314-620-6822 and we can discuss your individual situation to see if this is a right course for you.

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