I spoke to Dan Callahan reporter from the Mohave Valley Daily News last week.  Here are some of the excerpts from the article he wrote.

The practice of short selling a distressed property has seen a resurgence recently as lenders and banks are more willing to negotiate with homeowners who are unable to keep up with their payments. A short sale can take place when a homeowner is “short,” or owes more on a property than the property is worth. The homeowner then negotiates with the mortgage company to accept less than the full balance of the loan at closing. A buyer closes on the property and the property is sold “short.”

The process, however, is not necessarily easy. According to Petra Fahey, owner/Realtor with Country Ranch GMAC Real Estate in Bullhead City, a homeowner must be able to prove financial hardship and insolvency, find a buyer and negotiate a price. The lender must approve the short sale before it can proceed.

According to the Distressed Property Institute, if a homeowner can successfully negotiate a short sale with the lender, the effect on the homeowner’s credit score and credit history are far less destructive than a foreclosure. Additionally, a short sale does not have to be declared on a mortgage application. Similarly, eligibility for future loans also comes about much more quickly — two years instead of five.

“They’re definitely not wanting to foreclose,” said Fahey, of banks and mortgage lenders, making the possibility of a short sale much more realistic for many underwater homeowners.

“Always consult an Arizona real estate attorney and an accountant before proceeding,” advised Fahey.

To find a Certified Distressed Property Expert in your area, visit www.cdpe.com