The time is really hard these days. Many people have already lost their jobs because of the widespread financial difficulty. One of the results of the global crisis is the inability of home owners to pay for their mortgages. It is easy to pay when there's a monthly income to depend on. But with so many people getting laid off, the monthly budget can't afford to pay for all the monthly obligations.



Not having sufficient amount to pay the home mortgage is a very difficult situation. The house is such an important property. What's more difficult however is the consequence of default monthly mortgage. If the situation goes unchecked for a couple of months the lender may start a process that would end up in your house being sold to be able to pay the mortgage amount. If the initiative came from the lender then the process of foreclosure will start. At the end of the period of wherein the debtor is given a chance to save their house and no action is taken, the house will be sold and the proceeds will be used to pay up the house mortgage.

There are various solutions that the debtor can take before the start of the foreclosure process. One of them is short selling the house. A short sale is an agreement between the homeowner and the lender to sell the house at a price at slightly lower than its market value. Whatever are the proceeds will go to the lender. So the lender may get an amount lower than the mortgage value.

Though a short sale seems to be the only solution to the problem of default mortgage, the truth is there are lots of other remedies that will benefit the home owner as well as the lender. Be careful when transacting with a third party company regarding the short sale. A lot of people know that there are profits in short selling that doesn't necessarily go to either the lender or the home seller. Selling the property at a lower price is already a loss for the home owner. He will not get any proceeds because the agreement is that the proceeds of the sale are entirely given to the lender. The lender may or may not profit in the selling process but it will save a lot of money by bypassing the legal actions that usually cost a lot of money.

There are companies however who are willing to pay the home owner a fair amount of money relative to the value of the house. In this kind of transaction the home seller may actually sell the house at higher value thereby making profit in the sale of his property. This is not a short sale. The home is sold for what it's worth. A house is sold at a lower cost because of some selling mistakes. The house may have looked very old and the price is too high. It would be better to present the home as best as possible and price just right so buyers will not shy away from it.

A short sale may be good in order to sell the house fast. But if the home is good enough to get a higher price so that the full value of the mortgage can be paid while leaving enough for the seller then that would be the best solution.