Salt Lake City, UT (PRWEB) September 22, 2012
A Short Sale is one of the oldest strategies investors and real estate agents use to help homeowners avoid foreclosure. Although short sales continue to be a viable option for those facing foreclosure, there may be a new strategy that can help keep homeowners in their homes.
According to Jarad, CEO of Foreclosure University, a typical short sale is used when a home owner is upside down on their home meaning they owe more than what its worth and they can't make their payments anymore because of hardships. For more details on short sales click here.
Typically they've exhausted all of their options like tried to modify the loans but because of personal circumstances, still can't afford to stay in the home. And since the home won't be able to sell for what's owed, a short sale is typically the best option. Until now...
Foreclosure University has found an alternative solution called a note settlement that will allow homeowners to discount their second mortgages, similar to what happens with a short sale and still be able to stay in their home.
Unlike a short sale where the homeowner leaves with nothing but a bad mark on their credit, this alternative note settlement strategy allows the homeowner to re-established the equity that the home once had.
This is because the 2nd loan amount is "settled" or reduced by 70% to 90% of it's original amount, creating equity once again in the home for most homeowners. Plus it doesn't harm an individuals credit.
This now gives the homeowner more options, either to stay because loans have been reduced therefore, payments have been lowered or sell and walk away with cash in their pocket.
Jarad says, "Finally the homeowner wins for a change. Instead of doing a short sale and, walking away with nothing but marks on their credit, they have options that benefit them. They can stay in their home because payments are more affordable or they can sell their home because it has equity once again. So instead of walking away with nothing, they could potentially walk away with cash in their pocket."
Right now settling notes works best on second mortgages. The reason is because banks that are in second position stand a higher risk of not getting paid because the home is upside down. So the bank would rather take less now then end up with nothing later. Its all about the time value of money.
To learn more about note settling, visit the official site http://www.ForeclosureUniversity.com