Read about 10 options to rescue you (or someone you know) from the brink of foreclosure.
Homeowners having financial difficulties typically struggle to make their mortgage payments. Often they mistakenly believe they have no options other than to allow the bank to foreclose on their home. Nothing could be further from the truth.
Scroll down to the bottom left of the image below and then click on the up and down arrows to scroll through the document. You can zoom in and out by clicking on the plus and minus signs.On the Edge of Losing Your Home? 10 Options to Rescue You from the Brink
There are at least ten different alternatives to foreclosure. Here is a list of options for homeowners:
- Short Sale
- Forbearance or Repayment Plan
- Mortgage Modification
- Rent the Property
- Deed in Lieu of Foreclosure
- Servicemembers Civil Relief Act (SCRA) (for military personnel only)
- Sell the Property
Slipping toward foreclosure can lead to feelings of anxiety, depression, and loss of self-esteem. Don’t give up.
There are options available to help millions of homeowners rescue themselves from the brink.
Since it is crucial to act before a foreclosure takes place, now is the most important time for you to review the following options and solutions.
As a Certified Distressed Property Expert (CDPE), I was trained in assessing all foreclosure alternatives and pursuing the best solution for your own financial situation.
A short sale allows the homeowner to avoid foreclosure, minimize financial damage and move on from a burdensome, unaffordable mortgage.
In many cases, a short sale allows the borrower to qualify for a new mortgage in just 24 months, as opposed to five years or more after a foreclosure.
A trained real estate agent can negotiate a short sale with your lender if you have three qualifications.
- First, you must show some type of financial hardship.
- Second, you must have a monthly shortfall, meaning your monthly expenses are greater than your monthly income.
- Finally, you need to prove that your debts are greater than the value of your assets (certain investments, property, etc.).
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult for homeowners to achieve. The homeowner simply pays the total amount past due (including late fees) to the lender.
This solution does not require the lender’s approval and will “reinstate” a mortgage up to the day before the foreclosure sale.
Forbearance or Repayment Plan
A forbearance or repayment plan involves negotiating with the mortgage company to allow the homeowner to repay back-payments over a period of time.
The homeowner typically makes current mortgage payments in addition to a portion of the back-payments owed. This option requires lender approval.
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these.
These changes require lender approval and typically result in a lower payment for the homeowner and a more affordable mortgage.
Rent the Property
This option does not require lender approval, but does require the homeowner’s ability to rent the house for enough money to cover the monthly mortgage payment.
It is important to remember that there may be unexpected costs associated with the maintenance of a rental property in addition to the monthly mortgage payments. Homeowners should take this into consideration when deciding whether this option will work for them.
Deed in Lieu of Foreclosure
Also known as a “friendly foreclosure,” a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process.
Lender approval is required for this option, and the homeowner must also vacate the property.
A Deed in Lieu can potentially lessen the damage to a credit score and future loan eligibility, and sometimes the lender will forgo their right to pursue a deficiency judgment, meaning the homeowner will not be responsible for further payments.
Many have considered and marketed bankruptcy as a “foreclosure solution,” but this is only true in some states and situations.
This does not require lender approval, but you must have non-mortgage debts that you claim as a hardship.
Entering bankruptcy can be a risky and costly process. Be sure to seek the advice of a qualified bankruptcy attorney when pursuing this as an option.
As opposed to mortgage modification, refinancing means you will be acquiring a new loan based on your current credit standing.
If you have already missed mortgage payments, your credit score may make it difficult to find a loan with cheaper payments.
Servicemembers Civil Relief Act (SCRA) — for Military Personnel Only
If a member of the military is experiencing financial distress due to deployment—and that person can show that the debt was entered into prior to deployment—he or she may qualify for relief under the Servicemembers Civil Relief Act (SCRA).
The American Bar Association has a network of attorneys that will work with servicemembers to help qualify them for this relief.
Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent who understands the foreclosure process in their area.
Unfortunately, many homeowners in today’s market have experienced a decline in home value and may owe more than what the home is worth.
Pull Yourself Back From the Brink
If you are on the edge, you have no time to waste. Call me today; I’m here to lend a hand.
Place your confidence in someone with both training and experience to help distressed homeowners.
With the right assistance, the stress of facing foreclosure becomes manageable. CDPE- designated agents have received the knowledge and training necessary to assess all possible foreclosure alternatives and pursue homeowners’ best options.
A CDPE- designated agent attends several days of intensive, thorough training on foreclosure avoidance and how to negotiate short sales efficiently and ethically. The highly regarded CDPE logo means you are working with the most informed, up-to- date resource available.
Perhaps you may want to consider selling your farm, ranch, or midtown Tulsa home now while there are many buyers out in force taking advantage of record-breaking low mortgage rates.
Call Debbie Durkee today at 918-724-8201 to list your home.
This post is a re-blog of content I posted on my own website TulsaShortSaleAgents.com on August 14, 2013 (“On the Edge of Losing Your Home to Foreclosure?”)
Copyright © 2021 Deborah M. Durkee. ALL RIGHTS RESERVED — On the Edge of Losing Your Home to Foreclosure?