Can I Foreclose on a Home When it is Up For a Short Sale?

It is unfortunate that there are so many people out work in today’s current economic crisis. There are also many people that took out bad loans with arms. Loans with arms have variant interest rates which can make the monthly payments double or even triple just a couple of years after the loan was taken. It is because of these two factors that there are so many foreclosures on the market today. Many people are trying to avoid a foreclosure by doing a short sale. While this is definitely a viable option, some people do not realize that they can actually go into foreclosure while they pursuing a short sale if the mortgage payments are not made.

A short sale gets its name because it allows the home owner to sell the house for less than it is worth and less than what is owed. Therefore the price is often very attractive to buyers which will inspire a quick sale. However if you look on a realtors MLS system today you will see that there are literally thousands of short sales in almost every geographical location. It is a true buyers market as there is way more inventory then there are buyers. This may lengthen the time of any sale, even a short sale.

Also the term short sale may be a bit deceptive as the actual transaction can take much longer than a normal sale. Any offers on the house will be accepted at the sole discretion of your mortgage lender. This process can take up to three weeks after the offer is submitted, and the buyer can rescind their offer at any time which will start the process over.

Another factor that may delay the process is getting financing for the difference of the sale amount and the amount owed. Some mortgage lenders will require the borrower to fulfill their obligation of the loan by financing the difference from the sale amount in a short sale to the amount that is still owed. If an offer is submitted your mortgage lender will first have to ok the amount and then see if they are able to finance you for the remaining balance.

If you are in this unfortunate situation the best thing to do is to consult your mortgage company as quickly as possible. The sooner you contact them the more options you will have. You can also speak with a foreclosure assistance company. They have experts in these situations that will be able to give you advice and be able to negotiate with your mortgage company on your behalf to find the best solution.