If you owe more on your home than it is worth there are alternatives to foreclosure that allow you to avoid foreclosure. But you need to take action rather than just waiting for the bank or banks to decide what they want to do.
What do you want? What are your dreams going forward once this situation is resolved? It is not just a matter of giving up, there is hope and many others have rebuilt their lives. It will not be easy, but if you take steps for yourself, you can control some of your own destiny as you move forward. Some of this will be dictated by your own local market and personal situation but these steps listed from best to worst are open to you.
- Credit Counselling
- Get Current
- Loan Assumption
- Short Sale or Pre-foreclosure Sale
You can do a combination of these movinf through your situation, the earlier you act the more is open to you. If you decide to sell your current home and ask for a pre-foreclsoure sale or short sale, the terms mean the same but are are used in different parts of the country you will need to find a real estate agent who knows what they are doing to represent you. You do not need to be behind on your payments to ask your lender for a short sale, but you will need to qualify for some of the governmanet programs by meeting certain requirements.
You will need to be honest with this real estate agent, and you are going to have to get over the fear and embarrassment you may be feeeling to move forward. If this agent knows what they are doing they know what you are going through and will try to make you feel comfortable whilst at the same time explaining the process as you move ahead. This agent is going to become your best friend, and like any professional expert will at times have to tell you stuff you don't want to hear.
- To initiate a short sale you are going to have to make the first calls to your bank or banks. you will need to give permission to these banks to speak with your agent in writing, again your agent should have this form ready for you to sign.
- You will also need to write a hardship letter, hardship is not just financial, emotional reasons are just as valid, divorce, medical, loss of job etc..
- You will need to gather at least three past months of pay stubs to verify your income
- You will need to provide the past threemonths of bank statements
- Complete a financial information form
- Last two years of tax returns
- Provide any home owner or condo association information. Who is it? Telephone and address? When you made last payment?
Your agent will provide the following:
- All contact information
- Listing agreement
- Comparative Market Assesment
- and once you have an offer: Purchase Agreement/Offer
- A preliminary HUD1, the closing sheet
Your agent will contact the banks involved and provide all this information above to them with a cover letter. There is no guarantee that that the bank will accept the offer. Whilst many of the baks are trying to speed up the process, a short sale is anything but, so be patient, both as a seller and if you are a buyer, the whole process varies from bank to bank, and negotiations can vary in length. this is another reason for using the services of an agent who has handled short sales before as they know the process and can guide you through it without giving you undue expectations. Good luck and remember, there is light ahead, and it is not a train but the end of the tunnel. Once this is behind you, you will be able to rebuild your life and start again.
If you are buying or selling on or around Tredyffrin Easttown or along the Main Line we can help you, contact us or connect
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