Today, many American homeowners are faced with a difficult situation and must choose a way to deal with their impending foreclosure. Homeowners who are "underwater" - when their homes are worth less than the outstanding mortgage's value - are backed into a corner, as they are essentially being forced to make a decision that will impact years of their lives.
Traditionally, there are two directions that a homeowner can go in: A short sale or a foreclosure.
The short sale: Making the best of an untenable situation
The U.S. housing market, still reeling from the 2007 to 2009 subprime mortgage crisis, has begun to show signs of life. Home values have crept up in many parts of the United States, while some areas - metro areas in particular - have experienced more substantive gains. Institutional investors, hoping to capitalize on the recovery, have been indicating greater interest in purchase houses in regions all across America. Underwater homeowners, therefore, have an opportunity to sell to someone who is more interested in the long-term prospects of that property.
A short sale is a transaction conducted between the homeowner and the organization - usually a bank - that owns the mortgage. Under this scenario, both parties agree to settle the outstanding balance by selling the home, even though the amount received from the buyer is not the total amount owed. The logic here is that it is in the best interest of both the homeowner and the financial institution to accept a minor loss and move on separately. This option is attractive for each side because it does not involve a complex, lengthy court proceeding.
However, a regular short sale may leave the homeowner with few options after they part ways with their property. Without any form of profit from the sale, they might have little to look forward to as they transition away from the house they own.
The foreclosure: A worst-case scenario for every homeowner
The "f" word - foreclosure - is arguably the least attractive option for someone who has fallen behind on their mortgage payments. According to most home loan agreements, a bank has the right to institute foreclosure after the owner has defaulted on their mortgage. In this case, the bank is entitled to auction the property - which they now legally own - to recoup the losses on the loan. Foreclosure proceedings often end up in court, where a judge will decide when and under what circumstances a homeowner must leave the property.
The negative impacts don't stop there, unfortunately. Not only will the homeowner take a huge hit to their credit score - according to some finance professionals, up to 300 points of damage may be applied - but they could face restrictions on future home purchases. Every homeowner who is facing foreclosure should do all they can to avoid this unfortunate circumstance.
A better way: Turning to Help Share The Word for mortgage relief solutions
Thankfully, there is an alternative for troubled homeowners looking for ways to avoid foreclosure of their home, which in many cases has been occupied for many years. Help Share The Word works with everyday Americans to find a solution so that they can keep their homes. Our organization actually purchases the home and leases it back at a more affordable rate. This method means that both the mortgage holder and the homeowner are satisfied with the results, and no court proceedings have to be conducted. This saves time, money and, most importantly, lives.
Help Share The Word's services are only a phone call away, so homeowners who know they are in trouble shouldn't let a foreclosure notice sit idly by. To learn more about avoiding foreclosure, continue investigating our website and contact us today!