The national mortgage crisis is affecting millions of Americans and more and more people are facing foreclosure, but a growing number of Americans are choosing to short-sale their homes to avoid foreclosure.

A short sale occurs when a lender agrees to allow a homeowner to sell the home for less than the mortgage owed on it. The lender either absorbs the difference or requires a borrower to pay it back in a lump sum judgment or payment plan.

This allows homeowners to walk away from their houses without going into foreclosure and seriously damaging their credit.

In 2007 there were 2.2 million new foreclosure filings in America, up nearly 80 percent compared with the previous year. The average foreclosure cost lenders $40,000, and the last thing banks and lenders want is more houses to sell.

For many, a short sale is now looking like the last best option. Though it still diminishes one’s credit rating, the short sale is often vastly preferable to other options.

Real Estate Contributor and “Wall Street Journal” reporter Wendy Bounds shared the details on what you need to know about short selling your home on “Good Morning America” today.

Prove inability to make payments

The first thing you need to do is prove to the lender that you can’t make payments at the adjustable level. That will require some filing of paper work, some documentation showing that your income has gone down.

Find a willing buyer

The second thing is to find a buyer who is willing to buy the home at a discount rate. To do that you have to get a knowledgeable real estate agent or attorney involved, maybe someone who specializes in short sales. That’s important because pricing is incredibly important in the search to find the right buyer.

Get lender to approve sale

Lastly, you need to get the lender to approve the sale once you do find a buyer. That’s why it’s important to work with the lender as much as possible. That’s going to make it that much easier for you in the long run.

If you can’t complete a short sale

If the homeowner isn’t able to complete a short sale, the next option is either foreclosure or handing over the deed to the bank in lieu of foreclosure. Those options are worse for your credit than a short sale — that’s why it’s so important to get the pricing right. Work closely with an agent who specializes in this kind of thing and work closely with your lender so you’ll know what to expect.

Your home is your most important asset

Your house is the most important asset that you will own. Be smart and get everything in line, realize when the situation is deteriorating, write a compelling letter to the lender. That way, you’ll be able to get people to pay some attention to you. Pay attention to your home and don’t be in denial about the reality of this market.

Each week we’re planning to provide an example of a successful short sale in metro Atlanta. They come in all shapes and sizes. For the homeowner, it means avoiding foreclosure and being able to move on with their life without the damage that foreclosure can cause.

2006 Kensington Green Drive,

Smyrna, GA 30080

For the home buyer, they were able to benefit from the current market.

The original homeowner purchased this luxury Smyrna townhome for $517,800 in 2006. Through the short sale process, the home buyer was able to purchase the townhome for $361,500. That’s a savings of $156,000 or 30%.

The point that we want to show with this weekly series, is that distressed Atlanta homeowners have an option in avoiding foreclosure and that short sales are accepted everyday. What we also want to point out for Atlana home buyers, is that opportunities are available and should not be overlooked.

Contact us if you would like to talk to us more about short sales.