What EVERY Homeowner Needs to KNOW in Today’s Market

by on April 23, 2009

Let me be clear. I am a Foreclosure Prevention Consultant and my goal is to help Homeowners AVOID FORECLOSURE!

I provide a free consultation to review a homeowners options and do all that I can to help them deal with the situation.

Today I want to explain the options MOST often used to stop the foreclosure process…

1. Restructure (This is the MOST popular alternative)- This is where a loan modification comes in. You or a third party negotiate with the lender to get your loan in good standing again. There are many options available for doing this such as a separate payment plan for any delinquent amount or adding the delinquent amount on the back end of your loan. Sometimes you can even lower the monthly payment or the total amount of the loan.

2. Reinstatement – Pay your lender(s) all of your past due payments to bring your mortgage current.

3. Refinance – This is only an option if there is some equity in the property. You need to discuss this with your real estate professional based on the most recent comparables on your home.

4. Reverse Mortgage – Again, you must have equity and be over 62 years of age.

5. Sell you home – You simply sell your home before the foreclosure sale date. Sometimes, you are not able to get the price you want to cover the full amount of your mortgage which makes this a nonviable option.

6. Short Sale – I or another real estate professional may be able to negotiate a short sale on your behalf with your lender. In this instance the lender may take less than the stated amount of the mortgage due in order to avoid a lengthy and costly foreclosure.

7. Deed-in-Lieu of Foreclosure – It is possible to arrange for you to simply give the home back to the lender and walk away with a clean slate. As I mentioned in my last post, they will usually want the homeowner to at least attempt a short sale for 2-3 months before accepting this.

8. Bankruptcy – This is a last resort. It will only save your home temporarily. If you miss one payment during this process the lender will put you right back into foreclosure.

9. Foreclosure – You may elect to allow the house to be entered into Mortgage foreclosure. This is the most damaging to you and your credit. The Lender will take your home and any equity you may have. If you have no equity then you may get a deficiency judgment against you and you will have to repay that deficiency.

Next time I’ll clarify a few more points in the above possibilities.

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