How To Stop A Foreclosur Without Filing Bankruptcy

< P>The rate of home foreclosures is rising at an alarming rate; many people are struggling with unemployment, gas prices and the cost of food. Many people have purchased more house than they can afford and they just don’t know what to do. Some consider filing bankruptcy to get a chance to start over. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy and the Foreclosure Process. One of those options is called a "short sale."

A Short Sale is designed to help sellers possibly save their credit. The best time to work out a solution like a Short Sale is just after a homeowner misses a payment and sees no way of catching up. With a real estate agent’s help, the homeowner may be able to sell their property for less than the amount owed to the bank and walk away from the situation without any cost to them self. This is called a Short Sale, and most banks are willing to accept this kind of arrangement and pay the realtor involved a commission, since foreclosures are usually much more expensive than accepting a lower payment.
The decision to negotiate a Short Sale will allow the seller to rebuild their credit sooner. Foreclosure has the most damaging effect on your credit rating, even worse than Bankruptcy. A foreclosure on your property will remain on your credit report for ten years whereas a Short Sale will show as a "charge off" which will allow a seller to purchase another home within two years.

Although proper filing of a Chapter 13 Bankruptcy can stop a foreclosure; failure to make payments gives the creditor the option of restarting the foreclosure when it left off before the Chapter 13. For some people the Short Sale is a much better choice to get a fresh start.

Your lender will want a complete financial statement and an explanation of your situation justifying your request for mortgage relief. The following situations are considered hardships for the purpose of negotiating a Short Sale with the help of an agent:

Unemployment
Divorce
Medical emergency / sudden illness
Bankruptcy
Death

A Short Sale can offer a softer financial landing than bankruptcies or Foreclosure Process.When negotiating a Short Sale,you can require that the bank waive its right to a deficiency judgment and in most cases the lender is responsible for all the costs of the sale of the home. For home sellers who owe the lender more than their home is worth negotiating a Short Sale with the lender could be the solution.