Stop Foreclosure

Trying to get out of a foreclosure situation is a bit too much to handle when you are having financial difficulties. Most often in the United States, most debtors go as far as to declare a bankruptcy in court just to get out from under their debts. But for some, selling their property to stop the foreclosure as well as getting a meager earning for a fresh start can be quite appealing.

Stopping a Foreclosure

Before you aim at selling your property to stop its imminent foreclosure, there are other options available before you loose it entirely. One way to pay your debt is to meet with your lender and request a Forbearance. This method is simply defined when a lender will waive some fees on your debt so that you will be able to pay on time.

A debtor can also use refinancing as a method in paying your debt to avoid a foreclosure. You can search around for a lender which provides the best deals in refinancing loans so you will be able to pay your first loan and breathe a little easier with the extended deadline of the second.

Loan modification can also be an option to stop a foreclosure. A loan modification is somewhat akin to refinancing wherein the only difference is that your original lender will grant you a new loan to pay off the first one without re-applying.

Should You Sell?

If all these option fail, then the only solution left is to sell off your property to make ends meet with your debts. If you can find a buyer before the foreclosing date comes then you will be able to finish paying off your debt without going through the foreclosure process.

A short sale occurs when the creditor, or the mortgage holder, will approve of the sale of the property for the total market value. Lenders actually prefer a short sale rather than foreclosure since the cost of the latter is alarmingly high. And since most lending organizations are in the money-business, they would prefer a cash equivalent as payment rather than a property.

Also, this method is quite popular because if done right, you will be able to pay off your debt in full while keeping some of the profit to make a fresh start. But be warned that this method is also quite popular to those who seek to use your financial crisis for their own advantage to make a quick profit.

Where to Start?

Before you plan to sell off your property, it’s always best to know the playing field before you start the game. You first need to consult a real estate agent to know the actual value of your property. It’s safe to say that if you consult a professional first hand about the market value of your asset then you won’t fall prey to foreclosure scammers who prowl around for an easy profit.

Also, before you arrive at a set price for your property, you first need to take a closer look to how much you need to pay your creditor which might include the principal amount, interest rates, and others costs incurred by the transaction. With a specific number in hand, you will be able to find a market value for your home which will not only pay your debt in full; it will also give you enough elbow room to start over.

The Process

In case a short sale is chosen rather than a foreclosure, here are some processes that the borrower’s agent might need to make in order for the sale to push through. First off, an Authorization to Release Information must be made by the agent on behalf of the seller (debtor) regarding the approval of the sale. If a buyer is already at hand then a Purchase Contract must be made with full signatories from all parties.

A Financial Statement and a Sellers Net Sheet must be prepared by the agent to reflect the total proceeds of the sale of the property. And finally, a Hardship Letter and Documentation must be made by the seller (debtor) to explain the reason of the sale of the said property.