Phone: 408.497.2946Fax: 408.649.5203


When homeowners can’t afford to make monthly mortgage payments, homeowners have two choices:

Short Sale:
When owners can’t make monthly mortgage payments and house worth less than what they owe, then owners can make an agreement with the lender to sell their house for less than they owe. Short sale is a lengthy process, but it does not affect the credit score as badly comparing to foreclosing the property. Since foreclosures are more expensive for lenders, lenders often agree to the short sale and sometimes forgive the balance owed from the owner. In many cases the IRS considers the balance forgiven to be taxable income and owners owe tax on that amount.

When the homeowners don’t make the monthly mortgage payments for a certain period of time, the lender takes control of the property. Homeowners get a grace period which is also called pre-foreclosure. During the grace period the borrower /homeowner has the option to reinstate the loan by paying off the default amount determined by state law. When grace ends and homeowner / borrower was unable to make loan current, then lender takes away the property from homeowner.

Call us today to discuss what option is best for you.
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