Q & A: Short Sales
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Can a home owner sell a home for less than its mortgage?
In some cases a homeowner may be able to sell their home for less than they owe with the permission of their lender. This process, known as a short sale, means that the lender agrees to accept an amount less than the balance owed by the seller. Depending on the stipulations the lender requires, this type of transaction can be very complicated and can affect the seller’s credit.
Due to the intricacies of this type of sale, it is recommended that the seller first seeks the advice of a knowledgeable Realtor®, financial advisor, and their lender to discuss their options.
When does the foreclosure process begin?
The foreclosure process varies state by state. Generally, lenders will start the foreclosure process after 3-6 months of missed payments by the borrower. If the debt has not been paid within the parameters set by the lender, the property will be foreclosed on and eviction proceedings will occur. If a homeowner is in default of their loan they should immediately speak with their lender or a housing counselor to discuss available options to avoid foreclosure.