Deed in Lieu of Foreclosure
Can a home seller sell a home for less than its
mortgage?
This situation is known as a "short
sale." Sometimes home owners can negotiate with lenders and have
them split the difference between the sale price and loan amount,
which still must be paid.
A short sale may be complicated if the loan has been sold to the secondary
market because then the lender will have to get permission from Fannie
Mae or Freddie Mac, the two major secondary-market players.
If the loan was a low-down-payment mortgage with private mortgage
insurance, then the lender also must involve the mortgage insurance
company that insured the low-down loan.
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to Seller's page
When does foreclosure begin?
Lenders will initiate foreclosure proceedings
when homeowners become delinquent in their mortgage obligations,
usually after three payments are missed. The lender will then notify
the buyer in writing that he or she is in default. The lender can
request a trustee's sale or a judicial foreclosure, in which the
property is sold at public auction.
A borrower can cure the default by paying the overdue amount and
the pending payment after the notice of default is recorded, usually
no later than a few days before the property's sale.
Some sales allow the successful bidder to take possession immediately.
If the former owner refuses to vacate the premises, the court can
issue an unlawful detainer that allows the sheriff to come out and
evict them.
Borrowers should do everything they can to avoid foreclosure, which
is one of the most damaging events that can occur in an individual's
credit history.
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