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here are several options available to help you avoid foreclosure. The earlier you take action, the more options you will have available. You may not be eligible for all options but with the help of your REALTOR® and your lender, you can determine how best to move forward.
Remember, the worst thing you can do is to do nothing. If you take action as soon as you realize there is, or will be a problem, that is the best decision you can make - and one that may help you keep your home. |
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Repayment, Forbearance, & Loan Modification. If you can work out a solution with the lender quickly enough, you can contain or even avoid serious damage to your credit. That's among the reasons housing experts typically urge you to call your lender as soon as you know you'll have trouble making a payment.
However, lenders can make it tough to get to the right people. The folks you want to talk to are in the "loss mitigation" department. But many lenders don't routinely route borrowers to that department until they've missed several payments. Until then, you might be dealing with the lender's collections department, which typically offers one option: Pay up now. If you're serious about keeping your home, you may have to really push to get to right people. A REALTOR® who is versed in short sales and bank owned properties may be able to assist you in reaching the correct department.
Deed-In-Lieu If you can't sell the house for what you owe, but you're not deeply "upside down" on your mortgage, this may be an option: you propose handing over the deed to your home and your lender agrees to release you from your mortgage. This usually keeps you from having to pay any deficit that might be owed on the property, while the lender avoids further legal costs related to a foreclosure. We can provide you with an evaluation of what your home might sell for in today’s market, free of charge. That would be the first step in knowing which option is best for you. Click here to order your free evaluation online today. Lenders can't be forced to accept a deed, however. Typically, lenders require that the borrower make "a really good effort" to sell the home first and show that their delinquency was due to "unavoidable hardship" before they'll agree to a deed in lieu of foreclosure.
Short Sale If you believe that foreclosure may be the best option, such as in the case of being upside down on your mortgage, consider a short sale instead. A short sale is where the home can only sell for less than what is owed on the property, and due to your hardship, the bank, in working with your REALTOR®, agrees to accept the lower amount and thus avoiding foreclosure. In many cases the bank will release the borrower from the obligation to pay the remaining balance, known as the deficiency. We can walk you through the process so you have a full understanding of the steps & requirements involved. You will need to know what your home might sell for, so ask us to do a free evaluation today.
Foreclosure-AKA “do nothing” This is generally the worst choice. In some states and in some circumstances, the lender can even go after you in court for any deficit between what the house eventually sells for and what you owe. A foreclosure typically will also have the greatest negative effect on your credit.
No matter which option is best for you, you should consult your attorney, your tax advisor and your licensed REALTOR®. …. And start the process as soon as possible. |
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Beware of Foreclosure Rescue Scams |
