If you wish to turn "no equity" deals into big profits you always have the option to take recourse to short sale process. This is a process of settling debts in which the debtor negotiates with the corresponding bank or the lender to agree for less than what the home owner owes.
Why do banks short sale?
Short sale takes place only if the bank or the money lender agrees to it. Banks do not agree to short sale just if an owner files for one. Banks would first see whether the mortgage property is facing foreclosure or not. This is primarily determined by the owners financial condition – whether he is in a position to continue with his payments or not. Other factors that influence the banks decision include: depreciation of house value in the locality, poor condition of the house, or when the banks stock takes beating over defaulting loans.
What are the steps to a successful short sale?
The property owner must be in a state of financial distress
Short sale may be the only option available to clear off the loan
After initial consultations and an agreement over the sale amount, the homeowner needs to sign an authorization form.
The loss mitigation department of the bank must be intimated with a letter stating your inability to clear off your debts and enclosing a copy of the sales contract.
Keep ready the list and cost of repairs, and needs to be forwarded to the mitigation department.
When you are in financial difficulty, short sale process is the best way to settle your debts.
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