Short Sale Negotiation, also called Short Pay, is one method to stop foreclosure if a families house has declined in value or if they owe more on the loan the their home is worth. In a short sale negotiation, the lender agrees to accept the current fair market value of the house, even though this does not cover the vaue of the mortgage note, as a payoff for the mortgage loan. In this option, if done properly by a qualified lawyer, the lender is accepting less than what is owed on the property and writes off the difference betwen the sale price of the home and the amount owed on the house as a loss.
Why would you do a short sale? A short sale enables you to stop foreclosure and prevents the lender from suing you from the money that you owe beyond the value of the house. If you enter into a voluntary agreement with your lender for a short sale, a foreclosure won't show up on your credit report, which will help you qualify for a loan on a new property. Furthermore, in a short sale, you know exactly when your property is going to be sold, giving you peace of mind and time to vacate without the fear of eviction.
If you think that a short sale negotiation might be a good option to help you avoid foreclosure, talk to an experienced foreclosure attorney today and protect your family and your credit history.