We’re Not Out of the Woods Yet

Recently there have been glimmers of hope that our economy is finally seeing a pinhole of light at the end of the tunnel (There is your metaphor of the day!). Growth, while still slow (too slow for some) is at least…growth, and the housing market has, as some experts say, at least stabilized and in some areas showing slight signs of improvement.

That may not be the absolute most sunshiney positive outlook, but compared to where we were just a few years ago, there are many people who are in a better, or at least stable, place financially nowadays.

That doesn’t mean that there are those out there who are still reeling from the economic challenges we still face. Those who were able to survive the first wave of shock a few years ago may have now worn down their luck, and their finances in an effort to merely survive until things get better. This includes those who have tried their best to hang on to their homes only to find themselves upside-down in their mortgage, or struggling financially in an effort to keep up.

If you (or someone you know) is in this position, there is hope, and help. There are options homeowners have at their disposal to stay in their homes, or at least avoid a bank foreclosure. Here is a short list of those options. As a Certified Distressed Property Expert, you can also contact me with your questions, as I have many other answers and options for you. 

DON’T WALK AWAY
First things first. You may have friends or relatives tell you that it’s okay to just walk away from your home and let the bank take it back. That is the worst choice you can make. Walking away from a home and allowing it to go to foreclosure without at least trying to prevent it has ramifications for you that will last years. Aside from doing serious damage to your credit score, you will not be eligible for a conventional home loan for at least seven years.

LOAN MODIFICATION
Depending on your situation, you may be able to negotiate a loan modification with your bank. In a loan modification, the lender modifies the terms of your loan in an effort to keep you in your home and reassigns a lower mortgage payment and rate for either a limited or permanent length of time. If your mortgage is in arrears, you may be able to negotiate having those arrears tacked on to the balance of the loan as part of your modification package. Each lender’s loan modification programs and qualifications are different, so you can start by contacting your lender to find out what, if any, loan modification programs are available. You can also contact me if you have any questions about loan modification programs. 

UNEMPLOYMENT FORBEARANCE PLAN
This is a fairly new program through Freddie Mac (Federal Home Loan Mortgage Corporation) that requires mortgage service providers to provide up to six months relief for anyone whose financial hardship is affected due to unemployment. Relief can come in a temporary relief of payment (or forbearance) or special reduction in interest rate or mortgage payment for a set period of time. In some cases, this program may be extended upon approval for up to one year.

DEED-IN-LIEU
A Deed-in-Lieu of Foreclosure is where the homeowner, who has tried to sell their home,  avoids foreclosure by turning in, or deeding, their property back to the lender before foreclosure proceedings are initiated. This helps the homeowner avoid foreclosure, and doesn’t damage their credit as badly as having a foreclosure on their report. There are a few requirements in order to make a Deed-in-Lieu of Foreclosure happen:

A) the residence must already be on the market for a certain number of days (Varies by lender)

B) there can be no liens on the property

C) the property cannot already be in foreclosure

D) the offer of a deed in lieu must be voluntary

SHORT SALE
If you have exhausted  your options of being able to stay in your home and are facing possible foreclosure, then a short sale is the best option to avoid having the bank take the property. In a short sale, the bank approves the sale of a home whose fair market value is less than their loan amount. The seller must be able to demonstrate financial hardship, and there are some other qualifications and forms to be filled out for the lender, but otherwise a short sale goes just like a regular sale once it is approved by the bank. The seller pays no fees normally associated with the sale of a home including realtor commissions, escrow or title fees, appraisal fees, or property taxes. Contact me for a complete list of fees you don’t have to pay in a short sale. 

I am a certified short sale specialist and have saved many homes from foreclosure. I know what it takes to get your home approved for a short sale, and have all the answers to your questions about any of the foreclosure methods described above. Feel free to contact me by clicking here, or call me directly at 661-964-1256. You can also find out more about foreclosure avoidance by going to http://scvresourcecenter.com.

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