Prevent Foreclosures

If you are in foreclosure or about to be in foreclosure but your situation is not going to get better, then a foreclosure presale option may be something you might want to consider. For example, if a homeowner is divorced and all of a sudden, his or her income is cut in half, then the homeowner needs to move into a smaller home as he or she no longer can afford the existing home on one income. Under this circumstance, the income is not going to suddenly jump to cover the mortgage payments so the best thing to do is to make an agreement with the lender before things get out of hand.

What is a foreclosure presale?

In a foreclosure presale, the lender and the homeowner work together to sell the home before the homeowner is in serious default. The lender hopes that the home can sell for the amount owed plus any extra expenses incurred during the process of getting it sold. It the home is sold for a profit, then everyone is happy and the lender is paid off while the homeowner may keep some of the profit.

If the lender thinks that the home will sell for more than enough to payoff what is owed, then lender probably will not get involved much but will delay the foreclosure process if necessary. If the lender feels like the home will only sell for roughly what is owed or even less, the lender will work closely with the homeowner on what offers to accept, etc. The lender may have to approve any offers to buy the home prior to the homeowner accepting it. If the home will not sell for enough money to pay off the lender, perhaps the mortgage insurance will cover the difference.

When you are working with your lender on a presale of your home, it is best to make sure that the lender is not going to sue for any shortfalls later on.

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