Short Sale Or Foreclosure? Probably Neither - Stop Your Foreclosure And Get A Loan Modification!

Short Sale Or Foreclosure? Probably Neither - Stop Your Foreclosure And Get A Loan Modification!

The popular answer to a lender demanding payment or foreclosure has become You should do a short sale. I am a Real Estate Broker, a Home Builder and a Mortgage Loan Originator and I think this tactic is absurd. I really don't understand this advice from the Borrower or Homeowner's point of view.

The scenario is probably this: You, the borrower, were given a bad loan which graduated to a higher interest rate and higher payment making your new payment unaffordable; or you have had unforseen medical bills or other catastrophic events making your current payment unaffordable; or an income change, such as a loss of job or income.

But, everyone needs to understand that the problems with the current economy are very well documented in the news, on the internet, or self experience. Your Lender knows your problem better than you do, and they don't want your house. They can't afford to take on so many foreclosures and short sales properties. They are not equipped to deal with the mountains of property, and that by law, they can't keep or make a profit on anyway.

What your Lender needs is a paying borrower who is current. What does this mean for you? Your Lender actually wants you to keep your house. They don't want to foreclose and they don't want you to "short sale" your house. If they believe your situation is so bad that you can't make any payment at all, then they have no choice. But, can you make a lesser payment? Has your income situation straightened out and now you can make payments, but you can't catch up the payments you have missed?

If this is true, then your Lender wants to help you. Not, out of the goodness of their hearts, but because it makes good business sense. They will lose a lot more money taking your house and trying to sell it in today's low selling price market. If this is true, your home is worth less to your Lender and to you. If this is not true, why would you have sell your house for less than you owe ("short sale"). Your Lender will lose less money if they help you keep it and so will you.

If you know how the system works, it is very easy to Stop Your Foreclosure process and get a Loan Modification that fits your current situation. You are very certain to keep your house, but get a lower payment and have your missed payments put back into your loan, so that you can spread out this repayment over 30 years, or so. No money out of your pocket, except your next payment, which will be lower and you can move like before in your home, as if your money problems never happened.

So, why are realtors and others saying you should short sale instead of taking a foreclosure? Why aren't they offering you the idea of "Loan Modification"? Because, they make a real estate commission from any sale of your home. Short sale or not, this realtor will make a real estate sales commission.

How do I know? I am a realtor, builder and mortgage loan originator. I would never recommend a short sale. Why? They take a very long time. It is a humiliating process. It is an emotionally draining experience. It has a negative affect on your credit score (not quite as bad as foreclosure), that is similar to foreclosure. It just isn't worth the damage that you and your family take on personally. Besides, if your Lender would rather that you didn't accept foreclosure or attempt a "short sale". Your Lender would rather just change your current loan terms, to terms you can afford and let you stay in your home. The only person that would recommend you do "short sale" of your home is someone getting a commission. The Realtor will get a commission on your "short sale".

You could contact your Lender yourself and hack your way through the process. The process is not difficult to understand. The problem is that your Lender is having as many problems as you. I would recommend that you do it yourself if you have experience with the Lending System and are familiar with how it works. It your are not familiar, I recommend getting a professional to help you negotiate. But, there are good and bad "Loan Modification Negotiation" companies. You should talk very carefully with the company you choose. Ask questions. Get references of their success from clients who recommend them.

But, don't consider either a foreclosure or a short sale, unless your situation is so desperate that you cannot possibly make any payment now, or in the future. I negotiate "Loan Modifications" for a living. I assure you that this is the best possible answer to what you should try to do if you are behind on your loan and the Lender is beating you up with mail and calls. With a loan negotiator, you will almost certainly keep your home and be able to afford it.

Danny Hammond is an expert in the field of real estate and mortgages. He has over 35 years in the industry. Due to the current economy he is partners in a company called Total Financial Solutions, which specializes in helping troubled borrowers Stop Foreclosure and negotiate Home Loan Modifications. The goal is to help borrowers work themselves into a situation where they can keep their home and get lower monthly payments along with lower interest rate. Further almost all Loan Modifications can put all of the missed payments back into the loan, allowing the borrowerto become current by making just one of the new lower payments. You can visit the website of Total Financial Solutions at:http://www.mortgagepaymentmodifications.com Or Email:mortgagesolutionstoday@gmail.com

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