Foreclosures are continuing to dominate the market in many Bay Area cities. My neighbors recently lost their home to foreclosure. Under certain circumstances home owners are making a conscious decision to allow the lender to foreclose on their home. When I discussed their situation with my neighbors, they had already tried to modify their loan and had gotten nowhere with their lender. I do not have any knowledge of their financial situation and going through a foreclosure may have been the recommended solution for their specific financial situation. I always recommend to any of my clients considering a foreclosure or a short sale to contact a CPA or a real estate attorney so they can understand the legal and financial ramifications of their decision.

However, there are so many protections in place for homeowners these days and so many lenders are willing to accept short-payoffs as paid in full for less than the owed amount that I can’t help wondering if they could have done more to protect their financial future.  I watched them them have a garage sale and get rid of stuff, pack up their belongings and move, leaving their home that they had put a lot of time, energy and dreams into, I wondered if they had done all they could to either save their home or at least mitigate the financial consequences of their decision to let go of the house.

Pinole Real Estate

The first thing that will probably happen is you and your family will realize that you can no longer pay your mortgage, taxes and insurance without using your life savings which is probably not a good idea. If your financial situation is such that you have lost your job or been injured in someway and you realize that you will never make the kind of money you were making previously, you will have to make drastic changes to your lifestyle and deciding to downsize your housing costs will be the main way to reduce your outgoing expenses.

One of those drastic decisions may be to realize that you do not work for the rest of your life to support a house. Your home is where you and your family live and laugh, have fun, weather sorrows, stand together and face life. A house you are slaving away to pay for which keeps you from enjoying your life with your family is probably not what you bargained for when you decided to make the purchase. Sometimes, changing your life requires making painful decisions and changes.  It can be difficult but in the end, it is possible you will feel relief and a sense of hope for a better future with your loved ones. A short sale may be the way to go.