Avoiding Foreclosure: What are your alternatives?
1) Loan Modification – very rarely does this alternative offer permanent relief for the borrower. Rather it just changes the terms of the loan providing temporary relief.
Loan Modifications were very popular several years ago but now make up less than 5% of alternatives for borrowers who are upside down on their mortgage. The Kelly Cook Real Estate Group is committed to helping homeowners find a solution to foreclosure and if a homeowner wants to explore modifying their loan, you can still contact us and we will assist in helping in any way that we can.
2) Forbearance – time off from making payments OR reducing monthly payments for a short period of time to demonstrate ability to pay. Typically the amount of money that was not paid during this time will be added on to the back of your loan in some form or fashion.
3) Refinance – Must have equity in your house in order to be able to utilize this alternative.
4) Forgiving a Payment (rarely happens) – forgiving a payment without having to pay back – short debt forgiveness. But again, this is simply temporary relief.
5) Repayment Plan – spread out the missed payments over a longer term. This helps you get caught up on any payments already missed.
Now that you have your options, HOW DO YOU STOP FORECLOSURE?
- Sell your home – if you have equity
- Consider a short sale
- Sign a deed-in-lieu of foreclosure – deeding the home back to the lender. The borrower applies to the lender for a notarized deed then the lender forgives the mortgage which cancels the foreclosure action from the bank. However, this action will have the same effect as a foreclosure on your credit and possibly deficiency.
It’s not too late to get started!
We have helped many past homeowners just days before their foreclosure date avoid foreclosure by getting their lender to postpone the sale date. While it is always better to start the process as early as possible, we can still short sale your home even if you have a scheduled foreclosure date pending.