Question: Can a home seller sell a home for less than its mortgage?

Answer: In some cases you can sell your home for less than what is still owed on the mortgage. It is complicated and depends on the lender. This is known as a short sale. A lender will sometimes be willing to split the difference between the sale price and the loan amount.

A short sale may be more compliacted if the loan has been sold to a secondary market, as the lender will thenhave to get permission from Freddie Mac, the two major secondary market players.

Also, if the loan was a lowdown payment mortgage with orivate mortgage insurance, the lender nust then also involve the mortgage insurance company who insured the low down payment loan.

Question: When does foreclosure begin?

Answer: Foreclosure proceedings will be intitated by the lender when the homeowner becomes late in their mortgage payments, usually after three payments are missed. The buyer will then be notified by the lender in writing that he/she is in default. Teh lender can then request a trustee's sale or a judicial foreclosure, in which the property will be sold at public auction.