Do you know what will happen if you're late for a mortgage payment? It's possible that you'll be facing foreclosure proceedings when your lender thinks that you're no longer capable of paying your debt. If you are already in default then you probably already know about short sales and the two kinds of foreclosures.

If you really have to decide right away, please see a real estate lawyer or a tax accountant before taking any steps. But before consulting an expert, give me a chance to tell you what I know about foreclosure short sale.

You can opt for a short sale when the value of your house or property is less than your outstanding obligations. For example if Mr. David has a $100,000 mortgage but his house can only sell for $50,000 in the current market, he's more than likely to be qualified for a short sale.

Aside from short sales you can also opt to a foreclosure. As I said earlier there are two kinds of foreclosures, judicial and non-judicial foreclosure. Let's discuss non-judicial foreclosure first. With non-judicial foreclosure your lender (most likely your lender's agents) will act as a trustee and sell your house in a privately run auction. In essence you'll be selling a deed of trust so this process will not involve the court in any way.

With non-judicial foreclosure your lender or your lenders agent will act as a trustee and sell your house in a privately run auction. This process will not have the court involved in any way. The problem with non-judicial foreclosure is the fact that you will not be exempt from any liability from financial responsibilities more important than your mortgage.

This is where a regular judicial foreclosure comes in. When you're in default, just let your property go and the court will handle all the legal and financial proceedings in relation to your property.

I will not lie to you. Judicial foreclosure can take significantly longer than short sale and non-judicial foreclosure. It's also much more complicated and expensive than any other proceedings. The only benefit of a judicial foreclosure is the fact that you can protect your remaining assets (like your second house) from your lenders. When the bank sells your house in a public auction, your lenders can't go after you for any subsequent financial losses.

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