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Frequently
Asked Questions
Selling
Your Home - Q & A
Deed In Lieu of Foreclosure
Q:
Can a home seller sell a home for less than its mortgage?
A: This
situation is known as a "short sale." Sometimes home
owners can negotiate with lenders and have them split the difference
between the sale price and loan amount, which still must be paid.
A short sale
may be complicated if the loan has been sold to the secondary
market because then the lender will have to get permission from
Fannie Mae or Freddie Mac, the two major secondary-market players.
If the loan
was a low-down-payment mortgage with private mortgage insurance,
then the lender also must involve the mortgage insurance company
that insured the low-down loan.
Resources:
* "How to Fight Foreclosure," Jeff Jensen, Jensen Publications,
200 Main Street, Suite 104-201, Huntington Beach, CA 92648; (714)
843-0321.
Q: When does
foreclosure begin?
A:
Lenders will initiate foreclosure proceedings when homeowners
become delinquent in their mortgage obligations, usually after
three payments are missed. The lender will then notify the buyer
in writing that he or she is in default. The lender can request
a trustee's sale or a judicial foreclosure, in which the property
is sold at public auction.
A borrower
can cure the default by paying the overdue amount and the pending
payment after the notice of default is recorded, usually no later
than a few days before the property's sale.
Some sales
allow the successful bidder to take possession immediately. If
the former owner refuses to vacate the premises, the court can
issue an unlawful detainer that allows the sheriff to come out
and evict them.
Borrowers
should do everything they can to avoid foreclosure, which is one
of the most damaging events that can occur in an individual's
credit history.
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