You DO Have Options

Remember if your delinquent on your mortgage(s) you will get a lot of phone calls and all with information on what they think are your options.  You need to know exactly what your options are.   You will find that there are those people out there that will try to get you to do thinks that are in their benefit and not yours.  So will attempt to use scare method by telling you that if you do not act immediately, then your credit will be destroyed.  The next thing that they tell you is that they have a plan to help.  Please make sure that you have a professional assist you in this very important issue.

REMEMBER!  You do have options: Never just sit back and do nothing at all.  This will never solve the problem and will only make matters worst.

1. Deed in Lieu

• A Deed in lieu of foreclosure is where the borrower conveys their interest in the property to the lender to satisfy the loan that they owe that is currently in default.  This is done by the borrower in order to avoid foreclosure proceedings.  This option for lenders given the depressed value of properties in many markets, is not a popular option..  You may be asked to pay an additional amount or sign a note in this process because of the current market conditions.

2. Do Absolutely Nothing

• We never recommend that you do nothing.  Unfortunately a lot of borrowers do exactly that, nothing.  Most foreclosures that occur, you will find that the borrower never even tried to sell the property themselves.  This is due in large part that the borrower didn't know their options, were overwhelmed and intimidated by their situation and didn't understand the ramifications of a foreclosure.  You need to know your options and know how very serious ding nothing can be to you and your future.  You should always understand that having someone who is trained in the short sale process will make you life easier during this process and the savings to your credit will be worth the investment in time to find an agent that specializes in Short Sales.  

3. Loan Modification

• In an effort to help distressed homeowners keep their homes, lenders are more willing to consider loan modifications.  There is a government program in place called HAMP (Home Affordable Loan Modification).  You can always call your lender when you see that are or you soon will be in default.  The department of the bank that handles this maybe called the loan modification department, the workout department or even the loss mitigation department.  Whatever it is called it is an option to take a variable interest loan and make it a fixed loan or even try to lower the interest rate before you go into default.  Some lenders will allow you to refinance or ( ReFi) a loan.  In some cases you may also be able to get a reduction in Principle.

4. Negotiate a Forbearance Agreement

• For borrowers who have experienced a temporary hardship, such as health, disability, loss of employment, your lender may off you a forbearance agreement:  This is a short term fix where the lender allows you to make additional payments over a specified period of time to get the loan caught up to date.  In some cases the lender may choose to simply place the missed payments onto the end of the loan and thus extending your payoff period.  To do the the lender must feel comfortable that you will be able to make the payments in the future and that this was truly a short term hardship.

5. Refinance

• You can refinance the property.  This will pay off the existing loans.  You must have sufficient equity in the property as the new lending laws may require a certain amount of equity to be able to refinance.

6. Reinstatement

• If you have a temporary situation of hardship and fall behind or have your loan considered in default, you can ask the lender to reinstate the loan.  You must have the funds necessary to bring your mortgage up to date.  The lender(s) will typically allow you to reinstate your mortgage(s) and end the foreclosure process.

7. Sell Your Property

• You can always sell the property and if you have enough equity to cover all of the loans and the costs associated with the sale.  You can also sell the property and if there is lack of funds to cover all loans and closing cost, bring funds to the table to take care of any shortages.     

8. A Short Sale

• If you owe more than your home is worth in today's market, you might consider a short sale.  A short sale is when your Realtor negotiates a discounted payoff with your lender.  A Realtor that is fully trained in the short sale process can help you thru the process.  They will be you biggest asset and can make the process a smooth one with the lease amount of stress to you.  Remember the lender normally pays all the Realtor commissions as well as the closing cost associated with the sale, so it cost you no more to have a TRUE professional on your side in this difficult process.