Unheard of in the past, today banks are deciding to settle for less on outstanding mortgage loans than the borrower owes.  When this happens we have what is becoming very common, a short sale. 

A number of conditions can cause the short sale but most often this happens because the borrower is for whatever reason no longer to make their payments, and, the house is worth less than what is owed on the loan. 

Another option the borrower and lender may look at is to modify the loan—perhaps lower the interest rate, add the missed payments to the end of the mortgage and/or waive late fees.  This is usually the first course of action and if the lender finds that a modification is not going to work then they will consider a short sale and see how much of the loan they can recoup.

Foreclosures are an expensive and timely process for banks.  Usually foreclosed homes are in very poor shape thereby further decreasing the value.  If the loan modification does not work then working through a short sale with the borrower eliminates the legal costs to the bank of a foreclosure.   And for the borrower a short sale is almost always a better option than a foreclosure.  Both will affect the borrower’s credit, but the effects of a short sale can last only two or three years; the effects of a foreclosure will last seven years or more.

If you are a borrower and troubling with your mortgage payment, or if you know someone in this position I urge you to call me for a private consultation today, I know that the current economic conditions have caused many unbearable stress and heartache.  We can get your home sold and avoid foreclosure.

If you are a buyer, the length of time it takes to buy a short sale is longer than a traditional purchase, and you will likely need to purchase the property in “as is” condition, but with some patience you could find a great opportunity awaiting you and in the process help another family on the road to recovery.

Call me at 920-823-2219 or email me at Lisa@HomeInDoorCounty.com to discuss avoiding foreclosure of your Door County property and how ewe can accomplish a short sale for you.