Many people don’t realize they have lost their homes until a sheriff or realtor carries out the eviction order. Foreclosure auctions could take place with no prior notice to the homeowner.
If you are behind on your mortgage and have a pending foreclosure find out what options are available to you before you attempt to stop the foreclosure. Once you know what options are available, you can plan and take appropriate actions to improve your chances of getting a fresh new start. Even if your foreclosure is less than 7 days, there are resources available to help you keep your home. Consultation with our network of professionals is completely FREE.
Government supported programs may be available to you, including; HAMP, HARP, short sale. Other options include hard money loan, cash-4-keys and even a home equity loan, if you have equity on your property.
Don’t wait for the sheriff to show up at your door step.
Foreclosure Options To Keep Your Home
Options are available to help you avoid foreclosure.
Government / State / Lender Programs
There are a number of programs that permits the change in terms of an existing loan. Naturally, the goal of changing the terms is to get a more affordable payments in order for you to keep your home. Payment relief is accomplished by reducing the interest rates, extend the maturity date of the loan, forgive a portion of the principal balance or any combination of the three. Such programs will also bring put all the past due towards the back of the loan. Even is you are behind on property taxes, these programs will put your property taxes in good standing with no out of pocket cost to you. Fortunately, hardship programs does not require credit to qualify and accounts are eligible even if you are in foreclosure status.
Your bank may offer you a solution to arrange a payment plan to repay your past due delinquency over a period of time until your account is brought current. Although, a forbearance agreement is not as desirable as a loan modification, it is designed to stop the foreclosure upon completion of the forbearance agreement. A forbearance plan must be agreed upon by both the mortgage lender and the borrower on the loan where as the lender agrees to halt all foreclosure activity to give the borrower the opportunity to resolve the delinquency in a specified period of time. A Forbearance Agreement is designed to assist borrowers on a temporary basis, borrowers who may suffer a temporary financial hardship causing them to fall beind on their mortgage payments but unable to catch up. Depending on lender guidelines, a forbearance agreement can be as short as 4 months to as long as 24 months. The end result is to enable you to catch up on your mortgage and keep your home.
A Principal Reduction or principal forgiveness is a process where your lender agrees to waive a portion of the principal balance on your mortgage to the current fair market value. In some situations as low as 90% of the market value. A principal reduction normally requires a more aggressive negotiations in order for your lender to approve. A principal reduction can go hand in hand with an interest rate and payment reduction giving the borrower a rather generous benefit. At one time, a Principal Reduction was very difficult to come by as the lender stands to lose money, however recent government incentives to the investors of the loan as well as landmark lawsuits against the largest national banks have made it easier to request a principal reduction.
Foreclosure Options To Surrender Your Home
Options are available to help you surrender your home to avoid a foreclosure on your credit. Deed In Lieu A deed in lieu of foreclosure is a process where the borrower returns the key and all interest on the property back to the bank in lieu of a foreclosure. A deed in lieu satisfies the loan and avoid foreclosure proceedings. The benefit of a Deed in Lieu is that it has a less damaging effect than a foreclosure on your credit, hence rebuilding your credit will be easier and faster than if you were to have a foreclosure on your record.
One scenario where your lender does not accept a deed in lieu is if you have a 2nd lien (junior lien). In a deed in lieu the 1st lien holder must agree to assume any junior liens that come with the property. That is something the 1st lien holder will try to avoid and a deed in lieu may not be a desirable option for them.
A short sale is a process where the property is sold for less than the total amount owed on the mortgage, and the bank accepts the payment as full. The reason why the bank would accept this is because they stand to lose more money if the property were to go through the foreclosure process. A short sale benefits the borrower as the damage to their credit is less severe than a foreclosure and a deed in lieu.