Most homeowners dont understand the foreclosure process and are unaware of their options when underwater or facing foreclosure. There are different solutions depending on how you want your real estate financial health to look in 2-5 years.  And, it can be complicated figuring out the best solution to reach that goal.  Education is the best place to start. Once you understand the difference in the solutions, you are better equipped to make a decision.

Foreclosure is a legal process that a bank or loan servicer enters into when a homeowner fails to make their payments, doesnt catch up, doesnt do a short sale or loan modification and can eventually result in the homeowner losing their home. Depending on your state, this may be a strictly non- judicial process like Idaho and Massachusetts, a combination like  Washington State and California where the process sometimes happens outside of the court system and sometimes within the court system or a state with only a judicial process to foreclosure, like Connecticut and Delaware.

Seattle foreclosures can be either judicial or non judicial depending on whether or not the foreclosing bank wants to go after a seller for any amounts due from not satisfying the loan.  However, the vast majority are non-judicial because they are much less costly and follow a 4 month time frame. This time frame can be delayed, cancelled or strictly adhered to.  Ive extended some foreclosures for years for clients, depending on their needs and the types of foreclosure delays they have chosen. (such as bankruptcy).

A short sale. on the other hand, means that a home is being sold by the HOMEOWNER, not the bank, for less than the cost to clear all the debts against it.  Prior to 2006-7, selling a home normally meant getting your equity out. However, with a 35%+ drop in home values, 25% of homeowners are now upside down, or owe more than they own.  In a short sale, the banks (may be a first and a second or even a third mortgage or other liens) agree to accept less that the full payoff amount.

• The short sale process is not a foreclosure although a foreclosure may be advancing in time during a short sale.  If a homeowner waits until the first notice of foreclosure to begin a short sale, it may be difficult to stop that foreclosure clock and get a sale before the bank decides to sell the home and leave you homeless. The best advice is to not wait, but to begin with a short sale as fast as possible if you feel that you need to sell or are in imminent danger of a foreclosure.

The best way to start is with a consultation with a short sale foreclosure expert. Unlike normal real estate transactions, foreclosures are a battle between the homeowner and the lender.  The lender is NOT looking out for the best interests of the homeowner and will normally take the course that will net them the most money.  While realtors and lenders are typically the professionals that deal with home sales, only an expert in short sales foreclosures can understand how best to support the homeowner and advise the course to navigate.

I will always recommend that a homeowner seek the advice of an attorney as I am not an attorney and can not offer legal advice.  The advice I am giving here is strictly my experience of over 25 years helping homeowners navigate the real estate transaction with special training and experience in the short sale foreclosure process.

For a free initial consultation to help you make the next step, just call me, Eileen, direct now at 800-818-2438 or in Seattle at 206-735-HELP