The popular response to a lender demanding payment or foreclosure has become You should do a short sale. I am a real estate broker, home builder and mortgage loan originator and I think this tactic is absurd.

I don’t really understand this advice from a borrower’s or homeowner’s point of view. The scenario is likely as follows: You, the borrower, were awarded a bad loan that graduated to a high interest rate and a monthly payment that made your new payment unaffordable; or you have had unforeseen medical bills or other catastrophic events that make your current payment unaffordable; or a change in income, such as loss of job or income.

But everyone needs to understand that the problems in today’s economy are very well documented in the news, on the Internet, or from personal experience. Your lender knows your problem better than you do and doesn’t want your house. They can’t afford to take on so many foreclosures and short sales properties. They’re not equipped to deal with mountains of property, and by law, they can’t keep it or make a profit anyway.

What your lender needs is a paying borrower who is in good standing. What does this mean for you? Your lender really wants you to keep your home. They don’t want to foreclose and they don’t want you to “short sell” your home. If they think your situation is so bad that you can’t make any payments, then they don’t have a choice. But can you make a lower payment? Has your income situation been fixed and you can now make payments, but you can’t catch up on your missed payments?

If this is true, then your lender wants to help you. Not out of the goodness of his heart, but because he has good business sense. They will lose a lot more money by taking your home and trying to sell it in today’s very low housing price market. When too many houses are sold for too little money, your house is worth less to you and to them. If this is true, why would your lender want you to sell your house for less than what you owe (“short sale”)? They will lose less money if they help you keep it and so do you.

If you know how the system works, it’s very easy to stop your foreclosure process and get a loan modification that fits your current situation. You’re pretty sure you’ll keep your house, but you’ll get a lower payment and any missed payments will be put back on your loan, so you can spread this payment out over 30 years or so. No money comes out of your pocket, except your next payment, which will be lower and you will be able to move around your house like before, as if your money problems had never happened.

So why do real estate agents and others say you should sell short instead of foreclosure? Why don’t they offer you the idea of ​​”Loan Modification”? Because they make a real estate commission (money for the real estate agent) from any sale of your home. Short sale or not, this real estate agent will make a real estate sales commission.

How do I know all this? I am a real estate broker, builder, and mortgage loan originator. I would never recommend a short sale. Because? They take a long time. It is a humiliating process. It is an emotionally exhausting experience. It has a negative effect on your credit score (not as bad as a foreclosure), which is similar to a foreclosure. It’s just not worth the damage you and your family personally take on.

Also, your lender would prefer that you not try to short sell or allow your home to be foreclosed on. The only person I would recommend you do a “short sale” on your house is someone who takes a commission, you know, makes money. You can contact your lender yourself and work your way through the process. The process is not difficult to understand. The problem is that your lender is having as much trouble as you are. I would recommend that you do it yourself if you have experience with the Loan System and are familiar with how it works.

If you are not familiar, I recommend that you hire a professional to help you negotiate. But, there are good and bad “Loan Modification Negotiation” companies. You need to talk very carefully with the company you choose. Ask questions. Get references of their success from clients who recommend them. But don’t consider a foreclosure or short sale unless your situation is so dire that you can’t make any payments now or in the future.

Business “Loan Modifications” for a living. I assure you, this is the best possible answer to what you should try to do if you are behind on your loan and the lender is hitting you with emails and calls. With a loan negotiator, you won’t receive any more face-to-face calls while you save your home with a modification.