Debt Consolidation Through a Short Sale

August 26, 2009 by  Filed under: Debt 

A short sale is preferred when the price of the home falls below the amount owed to the lenders and when the home owner is not able to pay the monthly payments. It is done when the loan is going to be defaulted. The greatest advantage is that a short sale avoids foreclosure and prevents from a collapse in the credit rating. The current crisis in the economic situations and credit crunches has left many home owners with no option but to settle with a short sale. This will allow the property owner to sell the home below the market prices.

The properties that were bought in the recent 2 years were the most vulnerable and are widely exposed to the current fiscal deficits and problems. There is no point in panicking and one must think wisely about his viable options. The short sale can help the property owners to sell it and the difference of amount will be waived off by the bankers. The owners are not allowed to have any profits in this business. The old traditional way requires the house owner to encash the difference in the loan amount to the lenders.

There are different laws for the lenders to approve the short sale. The owners must have a rendezvous meeting with the lenders to discuss about the present market rate and a viable solution to compensate the difference in the loan amount. An amicable solution is arrived where in most of the cases the lenders are ready to write off the difference amount. The lenders will be lot more happy to settle for a short-sale as in the case of foreclosure, they will lose about 60% of the market value. Debt consolidation can be done effectively with the help of a well negotiated short-sale.

If you are looking for more information then feel free to visit Home Loan Modification and Mortgage Refinance.

Article Source: http://EzineArticles.com/?expert=Robert_K_Johnson

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