4. Forbearance - This is used most of the time, when a Notice of Default has been filed. You are allowed to delay or reduce payments for a short period, with the understanding that another option will be used at the close of that time to bring your account to a current status. Your lender, if in agreement, will then temporarily cease legal actions.

5.  Short Sale- Here is another abused tactic that is being pushed on homeowners by over zealous real estate agents (not all agents are like this) that profit from the sale of your home. Bottom line is that if you want to save your home, then this should be one of the last methods you utilize in the loan workout process. If you do not want to save your home and you have resigned to the fact that you are way in over your head, then by all means, find an experienced short sale agent (not just any real estate agent, but one with a proven successful track record) to assist you in dealing with your lender and getting your home sold.  

A short sale is primarily used when all negotiations for a loan workout have failed and you are upside down on your mortgage, meaning you owe more on the mortgage than it’s worth. The lender basically agrees to cooperate in the sale of your home and take a loss. You place the home for sale and any offers that are obtained will be presented your lender. Unlike a traditional real estate sale when the homeowner decides what offer to accept or not accept. Your lender will control the negotiations and you will not be involved in the contract negotiation of the sale of your home.

Many lenders are severely back logged in their short sale departments. Many are simply not cooperating and making everyones lives very difficult. Remember they are now debt collectors and you owe them money on a contract and they plan to collect on that.

The best advice is to seek an experienced attorney about the possible consequences of a short sale.

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