After a nice relaxing week end, you arrive at work Monday morning as usual. You park your (insert high-zoot brand here) in its usual spot, a space reserved just for you. The elevator ride up to your office is uneventful. The elevator doors open, revealing the spacious reception area. Except that Patty, the receptionist isn't at her desk. Hey isn't that Mr. Caluham, the district manager? Whats he doing here? The news comes soon enough. Sober faced, your DM explaines to the small group of emplyeees gathered in the reception area that the company has entered bankrupcy proceedings. You have 30 minututes to remove your personal belongings from your desk.
This story is the same one that has played out over and over across America. (and the world, for that matter) So where do you from from here? One things for sure, there's a Ford Tempo in your future. Gone are the days of endlessly dinning out. Vacation plans are canceled. ...And then there's the house. A beautiful, somewhat large home in a coveted neighborhood. You know that its only a matter of time before paying the mortgage will require eating Cup-o-Noodles for breakfast lunch and dinner. Besides, your already underwater. The solution is a short sale.
Its the next best thing to a foreclosure. Unlike a forclosure, instead of being kicked out by the bank (or the mobsters of their choosing) you voluntairly put the house on the market with the intent to pay back most of what is owed on the house. So in effect, you are allowed to walk away from the house and the associated loan with less than $20,000 in debt. It is however, NOT a silver bullut. Selling a short sale can be complicated and is always tedious. Oh, i forgot to mention... it absolutly ruines your credit. Hope you like renting, because it will be years (three, to be exact) before you will even be eligible for a 'sub-prime' mortgage.But thats better than the alternitive: your cloths, furniture and assorted junk will be hauled off to the dump, the locks changed and the house auctioned. This is what is what is known as forclosure. Once this happnes, your credit score will need skydiving lessons, and your eligabilty for anything more expensive than a pencile is as likely as world peace. Your credit is shot for the better part of a decade. So, in summery, if your going to lose your house, work with the bank under loan modification, or any other program they may have. Do not allow it to turn into a forclosure. As a last resort, a short sale may be the best option. ...and next time, try and take smaller bites.