If you are at risk of foreclosure, there are steps you can take to avoid having a foreclosure on your record. Burying your head in the sand and letting things fall where they may is the wrong approach. Â There is nothing to be embarrassed about when in distress if you do the right thing. The first step to take is to talk to your lender about your distress and let them know that you are going to put your home on the market in a Short Sale.Â The Mortgage Forgiveness Act of 2007 is set to expire at the end of 2013 after being extended another year. Â Depending on who your lender is, we real estate professionals are seeing some homeowners walk away with a substantial amount of cash by way of a government order with certain lenders to "pay back' to their clients for some of the wrongs they have done during the boom of the market. Â I've heard of sellers walking away from their sale with over $30k. Â I personally had a client walk away at settlement with $16k. Â You can imagine his surprise with this windfall.
We real estate professionals sees a lot of properties where the homeowner walks away from their home and this is absolutely the worst thing you can do! Â Some of these homeowners, in their emotional distress, trash the home and cause so much damage, it's shameful. Â Walking away from your home may be the easiest thing to do TODAY but it will haunt you for most likely the rest of your life. Â Having a foreclosure on your record does not go away and will affect your ability to get credit. Â Going through a Short Sale, which clearly, isn't the easiest path will allow you to be back in the market in 2-3 years if you work to keep your credit in good order.
May I suggest you think in terms of Karma? Â Keep this image foremost in mind as you move forward in life.
If you are unsuccessful in selling your home in a Short Sale you can always opt to sign over the Deed in Lieu of Foreclosure. Â However, with that said, you should NOT find yourself in that situation. Â There are plenty of competent agents who have successfully closed Short Sale listings and received for clients a waiver of deficiency judgement. Â A couple of my clients had to come up with $1,500 but most were cleared of all financial obligation. Â Banks have now learned how to process Short Sales so there is no reason for you not to be successful in moving your property off your plate successfully. Â One month ago, I was able to guide a local community bank through the process of a short sale on my clients condo when the bank had not done even one short sale.
If you are a distressed homeowner, give me a call. Â I'm glad to help you through a difficult situation so that you can get your life back on the right track to a healthy living situation mentally, emotionally and physically.
All the best to you and your family!
Cathy Chapman, Broker Owner Agent