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What is a Short Sale?
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Short Sale 4 Homeowners.com was a website designed to aid homeowners in their foreclosure prevention quest. We get you the important info need to help you make the best financial decision in these troublesome times. Our foreclosure prevention team can help you sell your home in a short sale, make a loan modification or delay the foreclosure from 90 to 180 days.

Selling a home in a short sale has become a common alternative to a foreclosure. More and more homeowners find themselves stuck in a position where they need to sell their homes, but the declining market value that the home will sell for is far less than owed on the home mortgage. Hence it is called a "short sale." For credit purposes, short sales are arguably better than a foreclosure, which would stay on your credit report for 7-10 years.

Whether you chose to modify your existing mortgage or utilize forbearance, Short Sale 4 Homeowners can help you find the best solution. With lower interest rates and an improved loan modification you benefit from a reduced interest rate and increased cash flow that enables many homeowners to consolidate their debts. Even if your mortgage company already notified the credit bureaus of your pending foreclosure, there are ways to rectify your credit permanently. We have been in the good position to help the majority of homeowners who looked to us to prevent a foreclosure.

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Bankruptcy to Stop Foreclosure

Bankruptcy is the voluntary or involuntary declaration of a debtor's insolvency (inability to pay his/her debts). In a federal court proceeding, consumers typically file under Chapter 7 or Chapter 13. Chapter 11 bankruptcy usually involves a corporation or partnership reorganizing its debts in order to stay in business.

Some homeowners who are facing foreclosure consider filing bankruptcy. Although for some people this might be an option, there are a lot of other things that you should try before filing bankruptcy to stop foreclosure. Remember, under the new bankruptcy laws passed in 2005, you have to get credit counseling from an approved non-profit credit counseling agency for 180 days prior to filing Chapter 7 or Chapter 13 bankruptcy. Creditors are not restrained from collection efforts while you are undergoing this mandatory counseling, so the foreclosure can still proceed.

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Short Sale Considerations

Try to see if your lender will agree to a short sale. In a short sale, the lender allows the property to be sold for less than the total amount due on the loan. The "deficiency" is the difference between the amount owed and what the lender collects at the short sale.

Bankruptcy Vs Modification
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Short Sale Considerations
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Short Sale 4 Homeowners is a foreclosure prevention company established to protect homeowners from losing their home by offering mortgage loan modifications, selling in a short sale or negotiating a foreclosure on the borrower’s terms. Our short-sale and foreclosure prevention team has almost 20 years of combined experience stopping foreclosures in every state.

For most homeowners, the important issue is deciding which option is best for you with your situation. We can help you mediate with your mortgage servicing bank that holds your note and propose bringing your mortgage up to date by deferring your late payments with forbearance for 9 months to a year and a half. We can help you move the lump-sum of your late payments to the rear of the mortgage amortization schedule.

Our advisory team consults people so they understand the foreclosure laws. We want to make sure that people exercise their rights as homeowners whether they choose to sell their home in a foreclosure, modify their mortgage or stretch out their stay with a foreclosure. We specialize in loan modifications that provide reduced payments and debt relief that enables homeowners to get back on their feet without losing their home in a foreclosure. Our modification team has experienced modifying the following types of loans: FHA, VA, Fannie Mae, Freddie Mac and traditional home equity loans.

What is a Short Sale?

A short sale is where a borrower sells a house typically for less than what is owed on the mortgage. The lender may come back to the borrower to collect the "deficit" (difference between what the house is sold for and what the borrower owed on the mortgage). But, in many cases, the deficit is forgiven. A short sale is different from a foreclosure in the respect that the lender never takes possession of the property. And, the owner doesn't receive any money from the proceeds of the sale. In the case of a foreclosure, if the house sells for more than what is owed on the mortgage, the owner will receive the difference after all fees are paid.

Why are Short-Sales and Foreclosures on the rise?

The experts say that short sales are on the rise because more financially strapped homeowners fall behind on their mortgage payments and see their homes' values plummet to less than what they owe. As a result, they are turning to short sales as a way to avoid foreclosure. A short sale salvages a borrower’s credit by keeping the up to 10-year black mark of foreclosure off. "Banks aren't happy about short sales," said Sherri Frost, a senior loan officer with Sherman Oaks-based Metro Cities Mortgage, "but they have few options."

 

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Bankruptcy Versus Loan Modification - During 2007, Realty Trac reported 1.77 million homeowners went into foreclosure, an increase of 78 percent from 2006. Moody's Economy.com forecasts that 3 million more home loans will go into default by mid-2009, and two thirds of these will go into foreclosure. The Joint Economic Committee of the U.S. Congress estimates that over the next two years, the nation will experience a loss of $71 billion in home equity as a result of the foreclosure crisis while tax revenues will decrease by $1 billion.

Two frequently-used options available to troubled homeowners who can't do a conventional refinance and don't qualify for the foreclosure bailouts are loan modification and bankruptcy. Read More >
Bankruptcy Versus Loan Modification

Loan Modifications Increase as Home Refinancing Decreases - The recent trend for revising loan terms has shifted away from traditional refinance mortgages and towards loan modifications. Even if homeowners are not late on their mortgage…Even if borrowers have no hardship in their life…

Many homeowners are testing the water with a note modification from their mortgage company rather than refinancing their home.
> Read more about loan modifications.

Tax Concerns in Florida with Short Sales - As Florida's coffers shrink in the face of a dour economy, confusion over a tax statute threatens to choke the flow of home sales at a time when the state is struggling under the burden of millions of unsold properties. The present statute mandates how much tax people pay when they sell a house.
> Read more tax implications with short sale homes

 

Foreclosure Stats

During 2007, Realty Trac reported 1.77 million homeowners went into foreclosure, an increase of 78 percent from 2006. Moody's Economy.com forecasts that 3 million more home loans will go into default by mid-2009, and two thirds of these will go into foreclosure. The Joint Economic Committee of the U.S. Congress estimates that over the next two years, the nation will experience a loss of $71 billion in home equity as a result of the foreclosure crisis while tax revenues will decrease by $1 billion.

FHASecure and the new HOPE for Homeowners Act provide holders of subprime variable rate mortgages (ARMs) that reset within a specified period a chance to refinance their homes into a fixed-rate loan. However, FHASecure expires on December 31, 2008, and not everyone will qualify for these foreclosure bailouts. What other options are there to prevent foreclosure? Two frequently-used options available to troubled homeowners who can't do a conventional refinance and don't qualify for the foreclosure bailouts are loan modification and bankruptcy.

 
 
 
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