| 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. |
| 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. |
