Government foreclosures are becoming increasingly high and so has Bank REO foreclosures as well. If you are one of those individuals that are currently experiencing the doom of foreclosure, there is help. The loss mitigation department of your bank will usually help you to do a short sale.
What is a short sale? It is when the bank agrees to accept a decreased mortgage payment balance for the home that is going into foreclosure. The process can be long, but in the end, it benefits both the bank and the homeowner. The bank will benefit from not having to face the high expenses of foreclosure and the homeowner will not go into foreclosure and mess up their credit.
When foreclosure repossession faces you, you can contact the bank directly or have an experienced real estate investor do all the work on your behalf. Of course, there is something in it for the real estate investor, whose desire is to acquire the property at a low rate that the bank is willing to accept.
Short sale should take place on or before the pre-foreclosure begins. The first three months during the delinquency is when you have time to adjust the balance on the loan. There is a lot of paperwork involved in the process, but the bank will give you a list of things that are necessary for the short sale.
Usually, it involves previous tax returns, pay stubs, financial hardship letter, and a comparative report from a realtor of what the houses in the area are worth.
When you report your financial situation to the bank before any attempt by the bank to consider property auctions or repossession, you are in better standing because the bank will see that you are trying to make amends.
There some things that you need to think about before contacting the bank for forbearance or short sale. You have to confident about your decisions. You also want to face the truth of whether you are in financial standing to commit to a mortgage or just move on. A lot of lenders these days will give the homeowner up to four months grace period if some type of payment is made during that time.
If you will proceed with the short sale, contact the bank and request a package from the loss mitigation department. You also need to show the bank that you have a secured buyer or they will not agree to the short sale.
A real estate investor, in that case, will become your buyer. Look in your local newspaper or online to find an investor. Do not release your deed to anyone or pay any money upfront to anyone. The bank will need to see a copy of the sales contract and a signed authorization to release information to the real estate investor who will be the one communicating with the bank in this case.
Real estate investors use foreclosure listings to find properties so if an investor receives a phone call from a homeowner, it makes the job of acquiring a discounted property in their own best interest. A good investor will help you to get the short sale process done.