In recent years the terms “short sale” and “foreclosure” have become buzz words amongst realtors, investors, and the public. It is very important to know the difference between the two when searching and considering putting an offer on these types of properties. Just simply knowing the difference can assist you in many ways of the process further helping you become successful in purchasing the property. A short sale is when a lender agrees to take less than what is owed on a property. This can be a longer than expected process in most cases. It is important that you understand the short sale process before placing an offer so you do not waste your own time. First thing to remember is that the bank does not own a short sale. The bank is only a lien holder of the property and the seller is still the seller in the transaction. This is the most common mistake when making an offer to a seller on a short sale. The seller remains the seller of the property until the title of the property is transferred via foreclosure. Many people tend to think that all offers must be presented to the bank when they must be presented to seller only. If the property does get taken back through means of foreclosure then it will become bank owned.
A seller has the ultimate decision on what offers the bank sees since they still remain the seller of the property. Believe it or not, but if you find yourself in negotiations with a seller in this situation and the bank counters your offer they technically do not have the power to do so since they are not the seller. The bank is countering the payoff or net amount they will be receiving once they the short sale is closed. While this happens all the time just keep in mind that the bank is only approving a payoff to the property. If conducted correctly this process should take between 60-110 days depending on what banks are involved and who is conducting the process.

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Obama’s Loan Modification Program is assistance for borrowers in danger of having their homes foreclosed or for those who dread to default on their mortgage now or in the future. Setting aside $75 billion, the government aims to utilize part of these funds to lenders who participate. The incentives and dole out for lenders, is to make up for costs and any other losses caused by the mortgage modification. If you have to refinance or modify your housing loan, the first and foremost on your list of things to do should be to choose a lender that is part of the program because:

Lenders participating will limit the interest to 2% and extend your credit to as long as 40 years to ensure that you do not become delinquent of your mortgage. Non-participating lenders will charge you rates that are much higher and will not care if you continue to pay your loan or not as long as they get paid!
Lenders participating in the modification program will still entertain your application even if your property’s value has become less than your mortgage. This situation is expected because of the effects of economic recession.

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To date, there has been a total of 1,917,514 foreclosures nationwide. These numbers are frightening when you think about the number of families that have been displaced because of losing their homes. As a real estate broker and certified housing counselor, I have counseled many people during their time of financial strain. Families are hopeless and scared and often times lack a clear understanding of what they must do in order to “Keep Foreclosure off their credit report” in addition to saving their homes. People from all social back grounds are dealing with the issue of foreclosure mainly because of situations that are out of their control and the astronomical number of adjustable mortgages that increased. So you ask the question, “How can I keep foreclosure off my credit report” and maintain my credit score? Below are a few things you may want to consider in order to Keep Foreclosure Off
-Short Sale – A sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrower.
-Loan Modification – An agreement between the lender and a delinquent borrower that changes the terms of the loan without refinancing the loan. This could mean that your mortgage payment are lowered.
-Deed in Lieu of Foreclosure – An agreement where a delinquent borrower gives the lender the deed and the keys and moves out of the property in exchange for forgiveness of the loan.
-Special Forbearance – A written agreement between the lender and the borrower which contains a plan to reinstate the loan that has been delinquent for more than 90 days. In this case, lenders will sometimes suspend mortgage payments to allow the borrower to recover from the cause of the default.

It is very easy to skip paying bills and the most difficult part is to cope with mortgage payment. It is very essential to set aside money for mortgage payment as soon as possible. If it is not possible for you to set aside money to pay the bills properly then you must look out from having to lose your property. If you are unable to make payments before the due date, then you are said to be in breach of your contract and you are in serious trouble. You can get a list of companies that may come forward to help you out. This list can be got from your mortgage company as well. One must take care that you contact the right kind of people as the rules are different depending on the area of residence.

The laws vary widely from one state to another. One must make sure that the conditions are met properly. When talking to these places, we will be introduced to numerous agencies and people that may come to help you out. One must know that there are many places where immediate help is available. One must always make sure that others or other companies must not take advantage of you. There are always a few who want to put into trouble and make money out of it. These people will only take away your money and push you into deeper trouble. If by any means you get caught with such peoples it becomes nearly impossible for you to come out of it. One must be very careful when dealing such matters.

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The short sale is a very good tool to be used for two reasons: extends the foreclosure process for many months and saves the homeowner from a public (foreclosure) sale. It appears that short sale is a good solution if the homeowner wants to keep the house and also if he wants to sell it. It works perfectly in both cases. The biggest challenge people have is preparing the short sale package. It is important the package to be put together correctly. Usually, the lender sends a list of items needed for the package. And if something is missing, they will send a letter requesting the document. I think that sometimes is a good idea to miss something. It can add one more month to the process. Any communication with the bank buys more time for the homeowner.
Now, back to the package. The items that need more explanation are:
-The buyer. As a homeowner who wants to initiate a short sale, you must find a buyer. (In my opinion, real estate agents are not the best choice). You can look for a buyer in the local newspaper. Find ads that say: We buy houses. Those are investors looking for a deal. You can also ask friends and relatives if someone wants to become your buyer. You need two things from the buyer: executed purchase contract and pre approval letter from his future lender.
-The hardship letter. It is a free text letter to the lender explaining what happened to you. Make the letter emotional. Tell your story. Extend on the reason why you are experiencing the hardship. Describe the condition of the house (may be you were not able to keep up with the maintenance and repairs). Do not ask anybody else to write this letter for you. You have to do it yourself.
-The preliminary HUD. This document is prepared by the closing agent (title company). It describes the real estate transaction and shows the lender how much they are going to net. In the short sale transaction the lender pays the closing costs in behalf of the seller. For example, if the contract is for $100,000 and the closing costs (together with junior liens pay off) are $10,000, the bank will be interested in the net amount, which is $90,000. Find a local title company and promise to close with them. They will prepare the HUD for you (for free, because they will get your business).

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Many people lose their homes to foreclosure not because they did not pay their monthly premiums, but because they did not know what to do. There are many who were in the same situations, even worse situations, but who were able to prevent foreclosure. This article looks at 3 effective tips that can help you be among one of those who succeeds in stopping foreclosure.
-Ignoring the foreclosure notice is a big mistake – Many people make the mistake of turning a blind eye to the foreclosure notice. If you are served with the notice, you shouldn’t ignore it. Instead you should spring into action immediately and start looking for ways to stop the process.
-Talk to your mortgage lender instead – You will be surprised that most lenders are willing to re-negotiate your mortgage if you will talk to them. The problem is that lots of people do not talk about their problems and this gives the mortgage lenders the assumption that such people are deliberately refusing to pay their monthly premiums.
-Seek the help of your attorney if all fails – If you talk to your mortgage lender and you don’t come to any favorable conclusion, then you should get your attorney involved, especially an attorney that has the experience in dealing with foreclosure in your state or city.

The reality of not being able to make ends meet in corporate and personal financial obligations has never rung more true than in the year 2009. Many business doors closed, foreclosure notes forced families out of their homes, unemployment rate was the highest it has been in over 20 years, and a financial global crisis unraveled before our very own eyes. So what is a business or home owner to do? How do you gain back your pride and build financial stability after it has been shred to pieces? Many Americans turn to filing bankruptcy, specifically, Chapter 13. But what does that mean? How do you know if it is the right option for you? Here is a brief explanation of Chapter 13 so you may see if it is the correct choice for you. There are many forms of bankruptcy available to address your business and personal dilemmas. For instance, if you were in an accident leaving you unable to work then bills pile up. Moreover, creditors are calling threatening to take away your standard of living due to unpaid bills. What do you do in this situation? Filing for Chapter 13 Bankruptcy might be the right answer for you. For Chapter 13 Bankruptcy filings stop and prevent foreclosure actions from occurring. It may allow you to breathe easier preventing your from being physical removed by authorities from your house.

Chapter 13 Bankruptcy tends to be appealing to businesses as well. For what if you are no longer able to pay mortgage on your restaurant property. Does the government come knocking on your door and take everything away, including the restaurant equipment located inside the business dwelling? What about the kitchen supplies, are the utensils taken away too? In most cases, the answer is yes unless you file for a Chapter 13 Bankruptcy. Chapter 13 Bankruptcy filings do not require the liquidation of assets. In Chapter 7 Bankruptcy liquidation of assets does occur. Therefore, perhaps Chapter 13 Bankruptcy is more suitable to match your needs than a Chapter 7 filing.

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The Making Home Affordable program is aimed to help save eligible homeowners from a deed in lieu of foreclosure. The guidelines of this program require lender to make a temporary reduction of payments for borrowers that are eligible for modification and are deemed to be in actual foreclosure or risk of imminent default.
The Qualifying Rules
- They mortgage loan itself has not been previously modified under the HMP.
- If delinquency or default is reasonably foreseeable regarding the mortgage loan. Loans that are currently in foreclosure are eligible as well.
- Mortgage loan must be secured by a one- to four-unity property, one of which must be the borrower’s principal residence: 1. Mortgage loans secured by condominium units and cooperative share mortgages are also eligible for the HMP; 2. Secured loans by manufactured housing units are eligible for the HMP as well.
- The property that is securing the mortgage loan must not be vacant or condemned.
- The borrower must document financial hardship and represent how they, the borrower, do not have sufficient liquid assets to make the monthly mortgage payments. They must do this by completing a Home Affordable Modification Program Hardship Affidavit as well as provide any and all required income documentation.

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As I have been writing throughout my articles, the short sale is a great tool and can be used for two purposes. It can help you stay in your home as long as possible or it can help you actually sell the house at a discounted price and avoid foreclosure. To answer the question if the short sale is successful means to clarify your intentions first. If you want to stay in the house, any approved short sale offer is a bad outcome. It is clear to see that depending on your intentions the actions you have to consider are different.
-The first thing to do when opening a short sale process is to find a buyer. No buyer – no short sale. Then you have to sign a purchase contract with him. Usually the price is very low, which does not matter for the first submission. Any reasonable price will do. Do not forget to ask the buyer to provide an approval letter from his lender.
-Prepare the short sale package and submit it (usually by fax). You can check my article about preparing the package. Make sure that you write your loan number on each page (very important). Check in a week to see if all of the documents have been posted on your account. If not, fax everything again.
-In a few months you will receive a call from a real estate broker to perform the BPO (broker price opinion). The result of the BPO will give the lender an idea about the fair market value of the property. The BPO can make or break the deal (whatever it means).
-If you use the short sale as a tool to prolong the foreclosure process, you want the offer to be rejected. Hence the higher the BPO – the less chances of acceptance. On the day of the appointment, make the house look very nice. Point out all of the good features and behave as a proud homeowner.
-If you really want to sell the house, then you want the offer to be accepted. On the day of the appointment do not even make your bed. The saying “the worse, the better” works perfectly in this case. Talk to the real estate broker and explain that it is a short sale and this is your only way out of foreclosure.

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Christmas is the right time for you to get over all your sorrows and look forward for some good times ahead. For most Americans bugged with credit card debt it is a damp Christmas with little cheer. They need to do something immediately to move out of this circle of debt and take quick steps towards becoming debt free. The options available for most credit card owners are either bankruptcy or debt management. The bankruptcy Vs. Debt settlement debate has been very actively followed all over the country. There are proponents for both the camps in the Bankruptcy Vs. Settlement debate. Both have their own set piece logic and reasoning to prove that one is better than the other. Let me tell you, it will depend on your situation. There are a whole lot of factors that will dictate whether bankruptcy is better or debt settlement is a winner.
The Bankruptcy Vs. Debt Settlement will hinge on the following factors
How much is the total debt incurred by you?
Which is the state you live in?
What kind of home do you own?
What are your current assets and future earnings?
What is the extent of protection enjoyed by you under bankruptcy laws?
If you are taking the debt settlement route remember that you have to pay 40 to 50 percent of the outstanding amount over a period of next three to five years. You may get a waiver of almost 60 percent of your net outstanding amount. However the creditors have to be convinced about your ability to repay.

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