For homeowners trying to avoid foreclosure, a Short Sale may not help them keep their home but it may save them a lot of money in the long run.

Many homeowners try at all cost to work with their bank to have their loans modified. In the process of getting this done, they continue to make payments on a mortgage even though their home is worth less than what they owe on the mortgage.

In some cases, homeowners may not be aware of alleged suspicious practices by lenders who will wind up initiating foreclosure proceedings against them while pretending to work with them on a loan modification.  A complaint filed by Nevada’s Attorney General against Bank of America charges them with luring families into their loan modification program under false pretenses, and other abuses by lenders have also been reported in the past year.

So do you try to get your loan modified in order to avoid foreclosure and losing your home, or should you cut your loses and opt for a Short Sale?

A Short Sale may be the homeowners’ best friend if the goal is to reduce debt and keeping their credit scores from getting worse.

If you are a homeowner facing potential foreclosure proceedings, look into the advantages of a Short Sale before you throw good money after bad.