When you have to sell your home for less than the balance of your mortgage, this is considered a “short” sale.
If you have experienced a financial hardship and you will not be able to continue making your mortgage payments, you should call me about pursuing a short sale instead of going late on your mortgage payments and allowing a foreclosure to happen!
Here is a list of some of the situations a bank will consider a hardship: Hardship Examples.
I am not of the school of thought that you must go late on your payments. Everyone knows that your credit score is decreased severely if you have a short sale or foreclosure on your record. What you may not have been told is that a good portion of that decrease is because you have gone 30, 60, 90, etc. days late in your payments! You will still have a credit score reduction for your debt being settled for less than what you owe – as is the case with any debt you settle on, medical bills, etc. But! It is not nearly the black mark as when coupled with late payments – or a foreclosure. And the length of time you will have to wait to be eligible for another mortgage is considerably less. A short sale can be approved if we can show impending failure.
A lender (the link is to a very knowledgeable one) will be able to verify this information.
LPK Realty Group LLC 