If you’re facing foreclosure and can no longer afford your home, you may qualify for a Short Sale —even if you haven’t been able to (or think you can’t) sell your home. A Short Sale is an agreement with your mortgage company to sell your home for less than the outstanding balance of your loan. Often, the lender will agree to a Short Sale and not proceed with legal action against you for the amount of your loan not paid off by the Short Sale.
If you qualify for this option, the process is similar to a normal real estate sales transaction. You should work with a real estate agent (preferably with recent Short Sale experience) to market and sell your home.
If your loan is owned by Fannie Mae (find out ), your agent should visit www.HomePathforShortSales.com , an online Fannie Mae resource for listing agents with information about what to expect in connection with a Fannie Mae Short Sale. If your loan is owned by Fannie Mae, you may qualify for relocation assistance up to $3,000.
You should also contact your mortgage company to tell them you’re interested in a Short Sale. The mortgage company may request authorization to release information about your loan; information supporting your qualifying hardship; and access to your home for an appraiser and real estate professional to assess its value.
There are certain conditions you should understand about the Short Sale process:
A Short Sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation.
And finally, if you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage (also called a Mortgage Release ™ or Deed-in-Lieu of Foreclosure). With Mortgage Release, you may be eligible to receive relocation assistance and may be able to remain in the home for an agreed-upon time period to ease your transition to new housing.