Although we witnessed a decrease in foreclosure sales in the second half of 2008 it was due primarily to a change in accounting practices by which many of the mortgage companies were simply delaying the reporting of delinquencies, sometimes as long as 180 days in order to make their balance sheets appear healthier than the reality of the situation.

In the first quarter of 2009 a number of mortgage companies voluntarily halted foreclosure proceedings as they awaited details of the Obama administration’s rescue plan for borrowers in trouble. A combination of incentives and revision of lender’s policies is now resulting in a number of solutions to a huge problem.

In the interest of preserving the value of their real estate portfolios, some lenders are becoming more willing to renegotiate mortgage payments to allow deserving homeowners to stay in their homes which is the most desirable outcome for all concerned. On the other end of the scale, however, there were the borrowers who "qualified"  under very loose guidelines, but in today's economy stand little chance of repaying the loan; The homes of these buyers are the most likely to be foreclosed upon.

Somewhere between these extremes are options which are available to homeowners who are not in the foreclosure process but may be in a distressed condition. They range from "deed-in-lieu of foreclosure" to the "short-sale".

The short-sale is a very viable option but it must be exercised within a relatively short window of time and requires a fair amount of knowledge and expertise to successfully jump through the hoops required by the mortgage companies. A successful short-sale will allow a borrower and a lender, working together to achieve a quick sale of a property, relieving the borrower of the debt and the lender of the expenses of a foreclosure proceeding. It is a somewhat complicated process, but with the assistance of a trained Certified Distressed Propert Expert, it can be accomplished successfully, resulting in a favorable outcome for the borrower with a minimal effect on a borrower’s credit rating.