Few situations in life are more stressful than facing foreclosure on your home. For many people who have found themselves in this difficult situation, loan modifications and short sales can prove to be helpful options. These options are great for many people who are trying to avoid foreclosure or bankruptcy, but there are some things that need to be taken into consideration and steps that need to be followed.
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If staying in your home makes financial sense and you can afford to do so, loan modification may work for you. During this process, your lender will review your current financial situation. They will look at your most recent tax returns, bank statements and pay stubs to determine whether you can afford to stay in your home. If so, the lender may be able to work with you to reduce the amount you pay on your mortgage each month.
If your lender is not willing to work with you to modify your loan or you are still unable to afford the mortgage payments even after a loan modification, you may not be able to stay in the home. Rather than waiting for the bank to foreclose, you may be able to sell it under a short sale. If a short sale is approved, the lender is willing to accept less for the house than what is owed on the mortgage at the time of the sale. In most cases, the difference is forgiven. Lenders are often willing to approve short sales because it allows them to recoup the majority of the cost without needing to take the property through foreclosure and facing the additional costs. As a homeowner, this option allows you to remain in control of the sale of your home rather than the bank, and your credit report will not say that you have gone through foreclosure.
Navigating real estate law when you are facing potential foreclosure is not an easy process, and it is not a process you should try to tackle on your own. At the Law Offices of Eric L. Nesbitt, you can get the help you need during this difficult time.