Avoid foreclosure short sale if you have 2 houses

Filed Under Finance |

by David Silver

It’s possible that you’re now facing foreclosure because you can no longer pay for your mortgage. I want to help you with your problem by informing about the options you can take. With more information about short selling and the two kinds of foreclosures, you can make a better decision.

It’s best that you consult a real estate lawyer or a tax accountant before making any life changing decisions. But in the meantime let me tell you what I know about foreclosure short sale. I’ll explain the differences between short sale, non-judicial foreclosure and judicial foreclosure.

You and your lender can agree to a short sale when the value of your house or property is less than your debt. For example if Luke has a $200,000 mortgage but his house is only worth $100,000 based on current market value, then he’s qualified for a short sale. Short selling will not earn you any money or equity. In fact all the proceeds of the sale will be used to pay for your debt.

Aside from short sales you can also opt to a foreclosure. As I said earlier there are two kinds of foreclosures, judicial and non-judicial foreclosure. Let’s discuss non-judicial foreclosure first. With non-judicial foreclosure your lender (most likely your lender’s agents) will act as a trustee and sell your house in a privately run auction. In essence you’ll be selling a deed of trust so this process will not involve the court in any way.

The problem with short sales and non-judicial foreclosures is asset protection. If you try for a short sale or non-judicial foreclosure, your lender will most likely go after your remaining assets in order for you to pay for your debt.

This is where a regular judicial foreclosure comes in. When you’re in default, just let your property go and the court will handle all the legal and financial proceedings in relation to your property.

The big down side of a Judicial foreclosure is that it can take longer than a short sale or a non-judicial foreclosure. It’s also a very complex and expensive proceeding than any of the two. But if you have a second house or any remaining asset, you can protect it from your lenders only by going through judicial foreclosure.

I have tons more of information about foreclosure short sale. Just sign up for my newsletter and you’ll get to download my exclusive 25 page report with the inside scoop about short selling. You can also get my in-depth how-to video about short selling and how you can protect your credit.

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And get the inside scoop on foreclosure short sale by watching this informative video on foreclosure short sale