What is a Short Sale? And How Can It Help with Debt?

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A Short Sale

A sale of a home when the proceeds do not pay off the full amount of a loan or when a lender accepts the payment to pay off the loan is a short sale. These types of sales are perfect for individuals who are struggling to pay off a debt or facing foreclosure.

There are many benefits to this type of sale for those who owe a large amount of debt or have various loans or lenders seeking payment.

The Benefits of a Short Loan

Being able to pay off your debt is the greatest appeal of a short loan. There are many other benefits to a short loan.

The main one is by paying off your debt without have your home foreclosed. Avoiding foreclosure is key since having a foreclosure on your credit report will have a negative impact on your credit score.

You are not the only one who wins in this instance. Your lender also wins by avoiding foreclosure proceedings. They tend to take up a lot of time and are very costly. In fact, the proceedings alone can cost the lenders more than the home is worth.

Buyers of the home also benefit. They can rest assured that the cost of the home is at fair market value.

How to Conduct a Short Sale

Initiating a short sale is not as difficult as some would assume. Mortgage lenders are more agreeable to the idea because of the reasons listed above. They would rather have a discounted mortgage payment than not be paid at all.

When conducting a short sale, it is best to consult with a professional who can act as a go between you and your lender. A professional loan modification expert will be able to convince your lender of your hardships (i.e. loss of job, illness, or divorce).  They can negotiate the sale price your lender is willing to accept.

Short Sale in NY

For New York residents in need of a short sale can look to USA Modification. We provide free consultations for our clients to find the best route for your financial situation. Please contact us today for your free consultation by calling 888.850.7075. Or visit our site to learn more about short sales or home loan modification. We look forward to working with you.

How to Halt the Foreclosure Process

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Does a Notice of Default Mean My Home is Lost?

Even though the economy has improved a bit over the last few years, there are still families that are struggling to make ends meet. Missing several mortgage payments will lead to your lender filing a Notice of Default. Receiving an NOD can cause a panic since many homeowners take this notice to mean their house is a lost cause. That is where they are wrong.

There are still measures that owners can take to save their home from foreclosure.

Saving Your Home from Foreclosure

Bankruptcy

Filing for bankruptcy will stop the foreclosure process immediately. This is due to a federal law prohibiting debt collectors from continuing collection activity, a foreclosure is considered a collection activity in this case. Once you are in court, the bankruptcy trustee will be the mediator between you and the creditor. Ultimately, you will have to pay your creditor but bankruptcy buys you more time to either save up your money or find another job. Bankruptcy also aids in creating a reasonable payment plan.

Change the Terms of Your Loan

Some mortgages come with an adjustable loan that enables a lender to prevent an increase or change the rate so that is more manageable. If your lender will not change the terms of your loan then you may need to seek out a home loan modification. A loan modification will decrease both your interest rate and monthly payment along with waiving late fees. Loan modifications can also be done during bankruptcy, be sure to ask your bankruptcy mediator about it.

Short Sale

If your home is worth less than the amount you owe your lender, then it is time to let your home go. A short sale is better than a foreclosure and mortgage lenders often prefer it over foreclosing on your home, the sale is actually better for the owner as well.

Since the lender will have to sell your home after foreclosing, a short sale is appealing since it will save them the aggravation of doing it themselves.

Home Loan Modifications

At USA Modification, we are in the business of helping homeowners save their home through home loan modifications. If you are unsure if you qualify for a loan modification or want to learn more, then please gives us a call at 888.850.7075. We offer free consultations.