Probably the worst thing you can do if you have equity in your home is to let it go to foreclosure. If you have equity in your home and can sell it for a good price before it is foreclosed, you might be able walk away from your transaction with money in your pocket and only minimal damage to your credit. Selling your home can be an especially good choice if you have a lot of equity in your home but insufficient income to make payments under a loan modification plan. You can usually sell your home for more than it would make at a foreclosure sale or auction. Foreclosed properties are often considered unpopular and risky investments, especially in states where the former owner has a right to redeem the property (which we’ll cover later in this chapter). Consequently, the pool of buyers for foreclosed homes is limited, and prices tend to be lower than for other homes. Selling your home yourself will likely benefit you and your lender.
WORKING WITH AN HOME LOAN ADVOCATE
When you must sell your home quickly to avoid a foreclosure, strongly consider speaking with an experienced Home Loan Advocate. Your local Home Loan Advocate will understand the ramifications and requirements of foreclosure in your jurisdiction. Additionally, a Home Loan Advocate has specialized training, to help you aggressively navigate and understand the foreclosure process and if necessary help you sell your home quickly and at the best price.
THE "SHORT SALE" ALTERNATIVE
If your mortgage is “underwater” (the home is worth less than the amount you owe on it), then a short sale might be a good option for you. In a short sale, the lender agrees to accept a payoff that is less than the amount you owe on your home loan. With some exceptions, this will satisfy your debt to the lender. However, you
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