Chat With Jenny

In today's economic struggels...we're seeing several homes going into foreclosure.  A new way of selling is now "short sales". 

When someone says the property qualifies for a "short sale" that means the bank which holds the deed of trust has agreed to accept less than is currently owed to the lender.

Recently I heard of a bank writing off $80,000 of the debt!

Don't forget, this comes with some penalty.  While it's not as bad of a ding on your credit as a foreclosure, it will definitely count against your credit score all the same.

So if you're behind in your payments, or struggeling to make those payments, you might consider talking to your lender.  If you can prove you have hardship, i.e., loss of job or illness, you might be able to renegotiate the loan payment and/or interest rate.

If you find you've already gone that route and are still having a difficult time paying your mortgage, you should revisit the situation with your bank and see if they would agree to a short sale.  What would happen isIn a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the owner. 

Often a bank will allow a short sale if they believe it will result in a smaller financial loss to the lender rather than foreclosing.

Good luck!