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Loan Modifications may be available if you qualify. You should speak to your mortgage company to see what they have available as there are many government backed “Loan Modification” programs and each mortgage company decides what program they will participate with. This can be a time consuming process.

What if you don’t qualify for a “Loan Modification”? You should always seek professional advice from a lawyer, tax advisor and/or a CPA as again you are unique. Some of your options may range between “Short Sale, Bankruptcy, Deed in Lieu or a foreclosure”.

Is a short sale better than a foreclosure? It could have less affect on your credit then the foreclosure. But there are requirements for a short sale, such as the seller must have a hardship (i.e. loss of job, divorce, illness etc.) and other paperwork involved.

How much time do I have before a foreclosure? Most mortgage companies do not do anything until you have missed your 3rd payment. Some may wait longer. But at some point they will serve you with a Trustee Sale notice. The foreclosure is scheduled 90 days after the notice has been filed. There are many different ways you may receive this notice including receiving it certified return receipt or posted on your property.

Short sale is when the bank agrees to accept less than what is owed on the property. Property values have plummeted in the area and the bank must accept market value for the property. If it goes into foreclosure it will be more expensive for the mortgage company and the home will probably sell for less than it would have as a short sale.

Who qualifies for a Short Sale? A homeowner must qualify for a short sale by having some kind of hardship that put them in a position where they can no longer afford to live in their home (ex. Loss of income, divorce, illness etc.). A homeowner will also have to provide several months worth of bank statements and other financial information.

Who pays the Real Estate commission to sell the house? The commission and most of the other sellers cost are usually taken from the mortgage company’s proceeds. The owner will not get any proceeds from this sale.

Will my debt be forgiven? Each situation is different. In many cases your mortgage company will agree to accept the short sale as full payment.

What about a “Deed in Lieu”? A “Deed in Lieu” is when the mortgage company agrees to take back the home. Most banks do not do this, although it’s becoming more accepted. This has the same effect on your credit as a foreclosure but the legal expense is less for the mortgage company.

It is important that you seek professional help from a lawyer, tax advisor and/or CPA as they will review your individual circumstance and be able to advise you on your options. When looking for aa Realtor find one that has experience doing Short Sales.