want to explore another option: the short sale. Even if you are already in the foreclosure phase with your lender, there might still be time to conduct a short sale of your house.
WHAT DOES A "SHORT SALE" MEAN? T SALE" MEAN?
Few consumers are familiar with the concept of short sales. In fact, a surprising number of real estate agents don’t even understand all the ins and outs of this process. Sometimes, when foreclosure is inescapable, the lender may agree to let you sell your house for less than the outstanding balance you owe on your mortgage. Why would the lender do that? Because lenders usually don’t like carrying foreclosed houses on their inventory. Taking repossession of your house is an unwanted and expensive problem for the lender. Lending institutions don’t make their money on foreclosures. They’re in business to leverage funds and earn interest on assets. Even if the money the lender receives from a short sale is less than what you owe on the mortgage, the amount might be more attractive to the lender than what they could get by allowing the property to end up in a foreclosure auction. The lender might opt for the “bird in the hand” amount of the short sale, as there’s no way to be sure how much a buyer would pay at auction. A lender’s losses on foreclosed homes can range from 20 cents to 60 cents per dollar, with a single loss being as much as $50,000, according to TowerGroup’s consumer lending division, cited in the Mortgage Banking magazine. To the lender, repossession often means taking on responsibility for a home’s maintenance and utilities while preparing to resell it. Lenders must secure the home against possible mold, insect infestation, and vandals. (A vacant home is an invitation to
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