Foreclosure Alternatives
You don’t have to foreclose! Chances are you may still have the opportunity to save your home. If you do not desire to keep the home, your lender may still come after you for any losses incurred by foreclosing. You have alternatives to remove the financial liabilities of foreclosure and even put some money in your pocket in the process.
A loan modification can become your best friend if you are facing foreclosure. Loan modifications have many benefits but two immediate factors you could enjoy would be stopping the foreclosure process and bringing you current on your mortgage. Beyond saving your home from foreclosure, a loan modification can additionally help make future mortgage payments easier to pay by permanently lowering your interest rate and possibly even reducing a portion of the principal balance.
If you are facing foreclosure, obtaining a loan modification is a time sensitive matter and we recommend you call to speak with a mortgage help counselor immediately. You may still have time to save your home from foreclosure, don’t delay!
A forbearance can delay the foreclosure process with a special agreement between the lender and the borrower which would then allow the homeowner to pursue alternative long-term solutions. A forbearance agreement allows the borrower to make a minimal monthly payment or no payment at all for a specified period of time, generally for three or six months.
In today’s economy, it is very common for borrowers to encounter unexpected circumstances which can make it difficult to make their monthly mortgage payment. If you have experienced a hardship and need some help with your existing mortgage payments a forbearance may be able to provide some temporary relief.
It is important to note that a forbearance agreement is only temporary and not a long-term solution. With the appropriate knowledge and representation we may be able to negotiate a new permanent agreement with your lender following a forbearance. Our mortgage help counselors can review your situation to determine whether a forbearance would be appropriate.
A short sale is an agreement where the lender allows the borrower to sell the property for less than what is owed on the mortgage note. Short sales are a great alternative to foreclosure for both the borrower and the lender. Yes, a lender loses money in a short sale but the general rule is their losses will be less than if they had foreclosed. A borrower benefits from a short sale with a less negative impact on their credit score and additionally has the ability to purchase a new home quicker than had they allowed the lender to foreclosure.
Additional benefits the borrower may experience with a short sale include but are not limited to the following: a short sale can alleviate the borrower from any future liabilities associated with the mortgage note; and a short sale allows the borrower to stay in the home until it is sold.
Homeowners who decide a short sale is appropriate for them can obtain professional help with no out-of-pocket expenses and may even be compensated for moving expenses upon leaving the property. Give us a call today and a mortgage help counselor can review whether a short sale is a good option for you.
A deed-in-lieu of foreclosure is where the borrower agrees to return the property to the lender prior to foreclosure proceedings. The deed-in-lieu of foreclosure agreement can be beneficial to both the borrower and the lender.
Following a foreclosure, the borrower may continue to be haunted by the lender as the lender pursues their right to recover any losses that resulted from the foreclosure. However, in a deed-in-lieu of foreclosure, the lender relinquishes their ability to seek compensation from the borrower for any losses. The lender wins by reducing the time and cost of a repossession while lowering the risk of any damage to the property through the eviction process. The borrower wins by being free of any future liabilities.
If your home is sold at a foreclosure auction, the acquirer of the note still needs to evict any residents from the home before they may take possession of the property. The eviction process can be time consuming and expensive to the owner of the note securing the property. This timely and costly process can often be overcome through a process called cash for keys.
Cash for keys is an agreement where the owner of the note pays those residing in the property to vacate in a timely fashion without causing any damage to the property in the process.
Repayment plans allow the borrower to retain the property if they can make their existing mortgage payment plus pay an additional amount to cover any past-due payments and late fees.
A repayment plan can help save your home from foreclosure but does not offer any additional benefits that may be experienced through a loan modification with a lower interest rate and lower monthly payment.
A chapter 13 bankruptcy is similar to a repayment plan as it provides protection to the borrower from foreclosure while forcing the lender to accept future and past due payments.