You may want to find out what your options may be.

Foreclosure may not be the only answer.  Did you know many lenders may allow you to negotiate what is now being called a "short sale".  Why would you do this?  Because quite often a short sale will not have the financial devastation to your credit as a foreclosure will.

Why would a mortgage lender accept less than what is owed?  Because many times the cost to the lender of the foreclosure process is much great than any potential loss if they agree to a short sale.  Here's an example:

Short Sale:  The bank accepts the hypothetical contract as follows:

Market Value: $200,000
Outstanding Mortgage: $190,000
Sale Price: $180,000
Closing Costs: -$4,000
Commissions: -$10,800
Proceeds from Sale: $165,200
Outstanding Mortgage: $190,000
Less Proceeds: -$165,200
Lender Loss: $24,800

Foreclosure:  The bank takes over the property to sell at full market value and is able to find a buyer and close within 6 months:

Market Value: $200,000
Outstanding Mortgage: $190,000
Sale Price: $200,000
Seller Concesssion: -$6,000
Legal Fees: -$7,000
Taxes: -$500
Insurance: -$1,000
6 Months Utilities -$600
6 Months Maintenance: -$600
6 Months Interest Lost: -$6,650
Association Dues: -$1,200
Closing Costs: -$4,400
Staffing Costs: -$2,000
Commission: -$12,000
Proceeds From Sale: $158,050
Outstanding Mortgage: $190,000
Less Proceeds: -$158,050
Lender Loss: $31,950

As you can see the bank is actually better off with a below market value offer even if tehy are able to sell a property in 6 months for full market value, the financial situation could be many times worse for the bank if the property declines in value, needs repairs, a tenant needs to be evicted and many other issues that may arise.  A short sale is a sure thing and the lender keeps the property off of their books.


We may not be able to help everyone, but our goal is to provide you with the information needed to determine your best course of action.  Our ideal outcome is to help you stay in your home.  What?  A real estate group not wanting to sell houses?  That's right.  We believe the issue of mortgage deliquencies and potential foreclosure is happening to so many great families that it doesn't seem right for everyone to loose their home.