Joe Wilson's Silicon Valley Real Estate Blog

Despite record low mortgage interest rates, many homeowners are trapped and unable to re-fi to take advantage of these rates to reduce their mortgage payments. Often this is because the market value of their home is less than they owe on their mortgage (they’re “underwater”). If they’re also financially unable to keep up with their mortgage payments then a short sale could be the best option to avoid a foreclosure. With a short sale, their lender agrees to take a short payoff and release the lien on the property so the homeowner can sell. While a short sale will temporarily damage the seller’s credit, it’s less damaging than allowing a foreclosure to take place. However, just because a homeowner may be “underwater” doesn’t mean the owner is eligible for a short sale. Most lenders require the homeowner to be in default on their mortgage and to document a financial hardship to qualify for a short sale.

If you know of someone who’d like to know more about the possibility of doing a short sale, let me know. I’d be happy to answer their questions, explain the process and assess their eligibility.