Foreclosure Alternatives - You Have Options
As limited as you may
feel, you have options other than foreclosure.
More than 6 in 10 homeowners delinquent in
their mortgage payments are not aware of services
that mortgage lenders can offer to individuals
having trouble with their mortgage.
MortgageModificationGroup.com can help you in many of the
areas listed below or even with a combination of the options
listed below. Remember that delaying matters only makes
foreclosure inevitable.
Reduce
Your Spending
Scaling down your lifestyle may be enough to
solve your problem. Perhaps you can drive a less
expensive car or eat out at less expensive restaurants.
With the economy sliding into a recession, more
and more credit card companies are willing to
reduce their interest rates. This will put more
of your dollars to work for you.
MortgageModificationGroup.com offers complete financial
statements that will calculate your debt-to-income
(DTI) in real time. Making adjustments is key
to getting to the roots of your particular financial
situation.
Get
A 2nd Job
You can’t expect the lender to offer to you a
mortgage modification if, at the end of the day,
even the reduced payment is not affordable to
you. If you want to keep your property, then
obtaining a second job can often cure your problem.
Another idea is to look for a roommate that could
contribute rent to offset your out of pocket
mortgage expense.
Reinstate
Your Mortgage
Pay the Mortgage Company all of the back payments
to bring your mortgage current. This option is
rarely attainable - - especially because the
lender will add late fees and any attorney fees
on top of your back payments. The total amount
is usually more than most people are able to
come up with.
Refinance
You may be able to pay off some debts and reduce
your monthly payments by refinancing your home
or some other property. The new mortgage may
have a much lower interest rate and, because
it’s repayable over many years, it could substantially
reduce the monthly payment.
Mortgage
Modification
A mortgage modification comes about when the
lender agrees to start over with a new rate and
term. A modification is a permanent or temporary
change in the loan and usually allows you to
roll in all missed payments, penalties and fees
into the new loan. The purpose is to help make
your mortgage more affordable.
MortgageModificationGroup.com is the leading provider
of foreclosure defense software. Our service
are complete, affordable and easy to use!
This is often the best possible solution for
both the lender and the homeowner.
Short
Sale
In real estate, a short sale is when a lender
allows a homeowner to sell the mortgaged property
for less than the outstanding balance of the
loan. Be careful -- the bank may allow the sale
to go through, but only on the condition that
you repay the deficiency. A short sale is commonly
executed to prevent foreclosure. Often, a bank
will choose to allow a short sale if they believe
that it will result in a smaller financial loss
than foreclosing. For the homeowner, the advantages
include avoidance of a foreclosure on their credit
history. In addition, new law does not require
the homeowner to pay taxes on the amount written
off by the lender. Finally, a short sale can
be faster and less expensive than a foreclosure.
Forbearance
Agreements
A forbearance agreement is a contract between
a homeowner and a lender where the homeowner
agrees to a repayment plan and the lender agrees
to reinstate the loan. Most repayment plans cannot
exceed twelve to eighteen months. Therefore,
you will have to pay your monthly mortgage payment
and the monthly repayment amount until you reach
zero balance on your past due amount.
Partial
Claim
Your lender may be able to work with you to obtain
an interest-free loan from HUD to bring your
mortgage current. You may qualify if your loan
is at least 4 months delinquent but no more than
12 months delinquent; your mortgage is not in
foreclosure; and you are able to begin making
full mortgage payments. When your lender files
a Partial Claim, HUD will pay your lender the
amount necessary to bring your mortgage current.
You must execute a promissory note. A lien will
be placed on your property until the promissory
note is paid in full. The promissory note is
interest-free and will be due if you sell or
leave your property, refinance or when your mortgage
matures.
Reverse
Mortgage
If you’re over age 62 and have plenty of equity,
applying for a reverse mortgage can certainly
solve your problem. A reverse mortgage does not
use credit or income as a basis for approval.
For more information on reverse mortgages, ask
a Mortgage Modification Group Specialist.
List
The Property For Sale
If you have equity in your property, than listing
your property is a smart idea. If you are able
to sell, you could walk away with enough equity
to give you a fresh start.
Hiring a top-notch real estate agent is key to
getting your house sold fast. A seasoned agent
will help you establish a realistic list price
and help you stage the property. A good place
to find a realtor is in the real estate section
of the weekend paper. This will eliminate 90%
of the part-time realtors that can’t afford to
advertise. Interview three realtors and choose
the one you feel is right for the job.
Legitimate
Investor
As soon as your foreclosure becomes a matter
of public record, hard money lenders, investors
and other types of “stop foreclosure” companies
will contact you offering help. Many of these
people are simply vultures that want to strip
you of your home and your equity. Distinguishing
the cons from the legitimate real estate investors
can be difficult, especially, while you’re under
stress. Should you choose this route, you should
retain your own attorney to review the documents.
Below are some common options legitimate investors
will offer you:
1- Offer to purchase your property with a lease option or
land contract.
2 - Give you quick cash to buy your home.
3 - Make a short sale offer to your lender.
Beware of foreclosure
vultures. One of their tactics is require
homeowners to quit claim or transfer the
property to them. Their goal is to make themselves
owners so they can refinance out all of your
equity.
Deed
In Lieu of Foreclosure
A deed in lieu of foreclosure occurs when the
homeowner conveys all interest in his/her property
to the lender to satisfy the loan. You no longer
face foreclosure, but you no longer own the property.
This option is advantageous to both the borrower
and the lender. The lender releases the borrower
from most or all of the personal indebtedness
associated with the defaulted loan. The lender
does not incur the time and expense involved
in foreclosure proceedings.
Bankruptcy
This is a last resort. If you are filing bankruptcy
for the sole purpose of saving your home, the
relief will likely be temporarily. You will
probably end facing foreclosure again if you
do not utilize one of the other options discussed
herein. To read about more about bankruptcy,
please see our informational section on Bankruptcy
and Foreclosure.
Walk
Away
Packing up and leaving before the sheriff arrives
is always an option. Before you walk away, you
need to know whether your lender can sue you
for any deficiency still owed after they sell
your property. This depends on the state you
live in and the type of mortgage you have. It’s
a good idea to consult with an attorney before
you decide to walk away.
Do
Nothing
If you have exhausted every available option
and you have no equity left in the property,
you can always choose to wait until the sheriff
shows up to evict you. Although there is no guarantee
when this day will arrive, you do know that it
will happen after the public sale date of your
property that is set by the court (in judicial
foreclosure states). If you choose this alternative,
it is imperative to save as much money as you
possibly can for starting fresh while you are
living rent free.
