Distressed homeowners opt for short sale

Koldene Walsh
Koldene Walsh
Attilio Leonardi
Attilio Leonardi

By Kristine Uyeno - bio | email

WAHIAWA (KHNL) -- In this tough economy, many homeowners are having a difficult time paying their mortgage.

Some face foreclosure.

But there is an option that more people, like the Walsh family, are choosing instead.

They lived in their Whitmore Village home for 7 years.

"We did a good job when we were here, it was perfect," said Koldene Walsh.

But then their lives changed.

"My wife had a stroke and we fell behind on the mortgage and tried to sell it on our own, and had all the realtors, and just had, bad timing," said Walsh.

So they decided to do a short sale.

"When you owe more than what the property's worth. So let's say the bank loan on the property is $500,000, but the market value is only $400,000, when you go to sell that property, you're not going to have enough funds to clear the balance on the mortgage," said Attilio Leonardi, realtor associate with RE/MAX.

A short sale is usually done to prevent a foreclosure. You also need the bank or lender's approval, to accept a less than full payout, which isn't easy. Although it's called a "short sale," many times, it can take awhile.

The Walsh family was lucky.

"He had it listed and it sold in a month," said Walsh.

They broke even on the short sale and look forward to a new beginning.

"It was very stressful for the whole family so now we're pretty much just starting out even, so we can get back on our feet again and one day we will be," said Walsh.

If you're having a rough time paying your mortgage, there are other options aside from a short sale or foreclosure. For example, you can also consider a loan modification.