Half million dollar house in Salinas, California under foreclosure. (Photo credit: Wikipedia)
Despite rapid increase in home prices in the 1st half of 2013, the housing recovery has not spared more than 25% of home owners who still owe more than their homes value.
Some of these homeowners have opted to file for bankruptcy protection to delay their decision on their home. In fact, during a recent meeting with Short Sale Managers at Wells Fargo she told me that she has more than 100 distressed properties that are pending foreclosures after the discharge of Bankruptcy!
The question remains on how these homeowners can avoid foreclosure to prevent further damage to their credit?! One option still on the table is still a Short Sale.
Our research shows 94 such properties in Santa Clara County are in pre-foreclosure state while the owners have filed for bankruptcy. In these cases the bankruptcy results in a temporary delay in the foreclosure process and once the bankruptcy is discharged the bank will proceed with the foreclosure.
What’s unique about the Short Sale option here is that it prevents further damage to your credit that will be marked with a Bankruptcy for more than 7 years. One of the benefits of the Short Sale are than the home loan is reported to the credit agencies as “Paid/Satisfied” which minimizes any damage to the owners credit score. Most lenders now offer Relocation Expenses as part of the Short Sale negotiations to motivate the owner to vacate their property where they have stopped making payments.
Feel free to contact us about your options after your bankruptcy is discharged since your bank is still willing to avoid foreclosure which might be the best option for you.
[maxbutton id=”2″]