Stop Foreclosure with a Short Sale

If you are in danger of losing your home to foreclosure, it is possible to put it up for a short sale instead.

This can only be done through the approval of a lender, who must agree to a discounted payoff to satisfy the rest of your existing loan. While a short sale means that you will lose your home completely, it also means that you will be free of your financial obligations to your creditor. The upside of this arrangement is that the creditor normally pays the sale costs, including commissions, title fees, escrow and repairs.

Since this is such a dramatic step, it is important to discuss all of your options with a bankruptcy attorney. You will also need to have an open and honest conversation with your mortgage provider about your current financial affairs and whether they will accept a discounted payoff. In many cases the lender will want to work with you to settle your obligations, rather than taking your home through a lengthy foreclosure process. Since they want to limit any more loss on your loan, lenders are more likely to work with you if you approach them before your home goes into the foreclosure process.