You can avoid foreclosure even if you've already fallen behind on your mortgage payments by selling your home quickly. A short sale might help. In a short sale, your lender agrees to let you sell your home for less than what you owe on it. The lender then takes the loss. If you sell a home on which you owe $200,000 for $170,000, your lender will take a $30,000 loss that you will not have to repay. A short sale can help you sell your home faster because you can price it lower. Selling a home through a short sale, though, is far from a simple process.
Call your mortgage lender and explain that you're either struggling to make your monthly mortgage payments or that you've already fallen behind on them. Ask for permission to sell your home through a short sale.
Write a hardship letter that explains why you can't afford your monthly mortgage payments. If you've lost your job, your spouse has lost a job or if you've suffered a costly injury, include this in your letter. If your employer has reduced your salary or moved you to part-time work, include this, too.
Copy financial documents that you can use to prove to your lender that your financial hardship is real. This can include recent paycheck stubs, bank-account statements or income-tax returns. Send these documents and your hardship letter to your lender. Lenders will usually only approve a short sale if their borrowers can prove that they can no longer afford their monthly payments. Lenders sometimes consider a short sale a more efficient and inexpensive option than taking over a home through foreclosure.
Find and work with a real estate agent who has experience with short sales if your lender approves your request. This agent should also be familiar with your market and with the prices that homes in it typically fetch.
Send any offers that you accept to your lender. Even if you are happy with an offer, your lender must give its approval. If the offer is too low, and the lender will take too great of a loss, your lender will be more likely to reject the offer. If this happens, your buyers will be able to submit a higher offer. You have no guarantee, though, that your lender will accept this offer, either, something that makes short sales an often frustrating experience.
Work with your lender and real estate agent to set a closing date should your lender approve an offer on your home. At the closing table, your buyers will sign the paperwork and pay any closing fees that will allow them to take over ownership of your home.
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