O'Brian & O'Brien Associates

if you cannot afford your home over the long term, you may need to sell the home and move to housing that you can afford. While this means giving up your home, you may still be able to avoid foreclosure. Discuss these alternatives to foreclosure with your mortgage company:

• Short Sale
• Pre-foreclosure Sale: If you cannot sell your home for the amount necessary to pay off the mortgage loan, ask about a pre-foreclosure or "short" sale. In certain situations, the servicer may be willing to accept a payoff amount less than what you owe on the mortgage balance. 

A pre-foreclosure sale should be considered only when all your efforts to cure the mortgage loan delinquency have failed and it is clear that the borrower cannot or does not want to keep the property.

Other guidelines are as follows:

• The borrower must be facing financial hardship and/or a decline in property value

• The borrower may be required to contribute cash or execute a note to mitigate losses

• Property must be free of other liens (including homeowners association liens)

• The borrower must execute all documents although sales proceeds will be paid to Fannie Mae