Tuesday, March 3, 2009

Top 5 Reasons to Pursue a Short Sale versus Letting Your Home Be Foreclosed

  1. Stress - A short sale is less stressful than a foreclosure.  With a short sale you have some say in the outcome.  With a foreclosure you are at the mercy of 3rd parties.
  2. Credit - A short sale is less damaging to your credit.  Either way you will have late payments on your credit report, but with a successful Short Sale the debt will usually be listed as satisfied.  A foreclosure will show up on your credit report.
  3. Time - If you notify your lender that you are trying to sell your home many times they will give you more time to stay in your home while you are trying to sell it.  You will likely not have to pay your mortgage during this time.  You should use this time to save your money so you will have some money to move and find another place to live.
  4. Release - If you successfully close a short sale you will usually be released of remaining unpaid debt.  In many states, with a foreclosure the lender can continue to legally pursue you after the foreclosure proceedings are over in order to try to recover the amount of the debt they were still owed after the lender sells the home (it is called a deficiency judgment).  Walking away without having any further obligation to repay a debt is reason enough to pursue a short sale.
  5. Responsibility - The responsible thing to do is to pursue a short sale.  Most homes are foreclosed simply because the owners refuse to face reality and will not deal with the situation.  This hurts the homeowner and the lender.  There is no reason for this.  The responsible thing to do is to mitigate the lender's loss and give yourself a chance at a future without that remaining mortgage debt weighing you down.

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