If you are in the situation where you can’t sell your home for what you owe on it and are unable to make your payments…you are not alone. The main three options in which you are unable to make the payments include Short Sale, Died-in-Lieu of foreclosure, and foreclosure.  A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. A deed-in-lieu of foreclosure is used mostly when all of the other options have been unsuccessful. “A Deed-in-Lieu of Foreclosure (DIL) is where you, the homeowner, voluntarily transfer the ownership of your property (the title and all property associated with it) to the owner of your mortgage in exchange for a release from your mortgage loan and payments.” Short Sale and deed-in-lieu of foreclosure are the two main alternatives to foreclosure.

So, is it worth it to attempt a short sale rather than just letting the bank foreclose on your house? Fannie Mae does a good job outlining the benefits to you as the homeowner of doing a short sale as opposed to going through a foreclosure, (see the list below)

What are the benefits of a Short Sale?

  • Eliminate or reduce your mortgage debt
  • Avoid the negative impact of a foreclosure
  • Start repairing your credit sooner than if you went through a foreclosure
  • May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)

More helpful information on your options and the process can be found at the Fannie Mae Site below. And always feel free to contact me if you would like more information or would like to find out if a short sale would be a good option for you. 612-729-7130.

http://knowyouroptions.com/options-to-leave-your-home/short-sale-option