Statistics show that nine out of every thousand homes in the United States had pre-foreclosure status in the first seven months of 2007. California is the national leader in the annual amount of pre-foreclosures, with 132,101 actual filings in the first seven months of the year. Alpine County in California saw an amazing 39.3 instances of pre-foreclosure status per thousand homes in July 2007.



What options are available to a homeowner in trouble? You don't have to sit back and wait for the bank to take your home away. Short sales offer pre-foreclosure properties an exit strategy.

Short sales offer an option to the smart homeowner that is trapped in a mortgage they simply cannot afford to pay. Whether your interest rate ballooned out of control, your job situation changed or you simply have more money going out coming in with your current income, there are options left even if your home is in pre-foreclosure.

How do short sales work? Once you find yourself in pre-foreclosure, find a realtor that specializes in such situations. Because the market is flooded with vulnerable homeowners, it is important to choose a reputable real estate agent.

They will assist you in approaching your bank or lender with the proper information to request a short sale. If this is granted by your lender, a large portion of your debt may be forgiven. In essence, short sales save the bank a long and drawn out foreclosure process and the expenses that go with it. They are likely stuck with several foreclosures and simply want to recover the majority of their funds. In other words, the amount of money you owe on your home becomes negotiable.

A good realtor will save your credit rating and help your family find an affordable home. It is wise to hire their services, as short sales can be tricky. For instance, you will need to consider interest in the total amount you currently owe on your home, which is not included on the amount listed on your monthly statement.

Your realtor will help you assemble documentation on your financial status. This is proof for your lender of your inability to pay on the mortgage. You will need financial statements as well as a hardship letter, which is a personal statement on your situation. Your realtor will then approach the bank on your behalf and attempt to free you from your unmanageable mortgage.

Pre-foreclosure is a stressful time. Just know that many other people across the country are in the same situation. The most important thing to remember is to be proactive, or else suffer the mark of a foreclosure on your financial records for many years to come. With guidance from a trusted real estate agent, you will find a way out of this difficult situation that will not leave you in ruin. Short sales help save your financial status.