Q: We've been turned down repeatedly for loan modifications and have been stuck in foreclosure for several years. Truthfully, we don't need and can't afford this much house anyway. The court has scheduled the foreclosure auction for about six weeks from now. Is there anything we can still do to soften the blow from all of this? – Gail

A: It is important in a situation like yours to focus on minimizing the damage to your lives. If your home is "underwater," your lender can come after you for the difference between what you owe and what the property is worth when it's sold. This is called a deficiency judgment. Your lender may be able to garnish your wages or take your assets to pay off this amount. A completed foreclosure sale is also more of a hit to your credit score and ability to get a loan in the future.

Although you don't have much time, I strongly suggest you try for a short sale. In the typical short sale, the lender will waive the deficiency judgment (make sure to get this in writing). While this still hurts your credit score, it's not as bad. A short sale usually takes longer than six weeks, but you may be able to get the foreclosure postponed by showing the court you have started the short sale process.

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ABOUT THE WRITER

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

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