Leaving Your Home and Avoiding Foreclosure

Apr 8, 2013

Short Sales are a growing trend with homeowners who want to repair their credit faster by being released from their current mortgage debt. A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a Short Sale, you can sell your home and pay your mortgage balance with the proceeds. If the home is your primary residence and you have a Fannie Mae loan, a cash incentive up to $3,000 may be available to help with moving expenses.

Nationally, short sales made up 22 percent of all residential sales in 2012, a four percent increase from 2011 according to a report from RealtyTrac. Short sales have become a popular alternative to foreclosures because they eliminate the time-consuming and difficult foreclosure process, said Daren Blomquist, vice president of RealtyTrac.

Interested? Contact your mortgage company to discuss what options are available to you.

Are There Other Options?

If a Short Sale is not a viable option for you, and you have a Fannie Mae loan, ask your mortgage company about a Mortgage Release (Deed-in-Lieu of Foreclosure). Mortgage Release offers three graceful exit options, providing you with flexibility on when to leave the property (immediately, within 3 months, up to one year). In some cases, you may be eligible to receive up to $3,000 relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

To qualify for Mortgage Release, you’ll work with your mortgage company to:

  • complete the eligibility process, such as determining the value of the property and how much you still owe as well as reviewing your current hardship
  • review the options available under Mortgage Release (your mortgage company will help you choose the best option for your situation)

If approved, you will be required to sign standard pre-closing documents as well as attend the closing. A Mortgage Release usually takes around 90 days to complete, but this could be shorter or longer depending upon your specific situation.

Contact your mortgage company to find out what options are available to you. Regardless of the option you chose, you must leave the home in good condition, free of interior and exterior trash, debris or damage, and remove all personal belongings.

Rebuilding Faster

While it may be difficult to think about leaving your home, it may be the best option if you can no longer afford your loan payments. The most important thing is to avoid foreclosure, which can be stressful, embarrassing, and have long-lasting impact to your credit.

If you have a Fannie Mae loan and want to talk to a housing advisor, contact a Fannie Mae Mortgage Help Center.

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