When it comes to distressed real estate it is important for home owners to know that foreclosure is avoidable.  Foreclosures have been in the media so much over the past few years that the term is commonplace, but the reality is that foreclosure is not something that most people want to face, or need to face.  It is important for home owners to know their options and understand that foreclosure is the last stop on the distressed real estate road.

• Short sales are an option for those whose property is in the pre-foreclosure state.  Basically a short sale is when a home owner sells his property for less than is owed on the loan.  The lender has to approve the short sale for it to happen.
• Reinstatement is when a home owner is able to catch up on past-due loan payments and a home loan is back in good standing.
• Loan modification is when a mortgage is changed, typically by lowering the monthly payments and perhaps extending its length.  Loan modification leads to the reinstatement of a loan.
• A forbearance agreement is when a lender agrees to suspend payments for a given period of time.

When dealing with distressed property it is important for people to know what the options are.  A Realtor who is savvy in short sales can help tremendously as the process can be difficult and easier with experience.  Look for Realtors who are either a CDPE (Certified Distressed Property Expert) or an SFR (Short Sales & Foreclosure Resource).  Foreclosure is an avoidable predicament if a home owner takes the necessary steps.

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