When you are struggling financially, paying your mortgage can be a huge burden. Many adjustable mortgage borrowers are feeling the impact of decreased home value and higher interest rate. More and more adjustable mortgages have passed the initial period of low rate and been reset to a higher rate. Many home owners are facing 50-100% increase of their monthly payments. All the financial stress has forced many homeowners to face the reality of losing their homes. More and more MN MLS Multiple Listings are foreclosed homes.
However, foreclosure is avoidable if you can make a "short sale". A short sale takes place when a homeowner owes more than the home's market value and the owner wants to avoid foreclosure. Rather than letting the bank take the home, the seller works to get the lender to agree to take a reduced amount.
Because the lender can lose a large amount of money upon a foreclosure, a short sale can significantly reduces the lender's loss. It can benefit both the home owner and the lender to avoid foreclosure. However, a short sale is a very complicated process and it requires special knowledge in handling various aspects of the transaction.
There are often several steps in a short sale process, starting with explaining to the lender about your situation. Most lenders typically do not want to disclose any of your personal information without written authorization. If you are working with a real estate agent, you should write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. Then you need to let the lender know the expected sale price of your home and outstanding balance of the loan, plus other costs involved in this real estate transaction.
A "Hardship Letter" is necessary, which explains why you are unable to keep up with the loan. This will give the lender an idea as to whether it is in its best interest to accept a short sale or go ahead with foreclosure. The home owner also needs to disclose all income, assets, bank statements to show that the owner indeed can't afford to keep the home. For more info, please visit: MN Short Sale
or call 612-605-2785
A short sale is a good alternative to foreclosure, but it needs to be handled properly. We have agents who specialize in short sales in Minnesota and will be happy to help you navigate through this complicated and difficult process.
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