Most folks might not know there are other avenues that can be researched to avoid a foreclosure & the affects it will have on your credit. The first step in a different direction would be to talk to a Realtor who has experience in short sales. Here are some of the alternative options a Realtor can help you through:
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Reinstatement - In this situation a homeowner might have missed payments but their hardship was temporary. In order to be reinstated they will be required to pay all back payments, late fees & legal fees but can be reintstated as they were prior to the hardship.
Forbearance or Re-payment Plan - This happens in the situation much like the reinstatment but here the homeowner can't afford to pay a lump sum payment so arrangements are made with the mortgage company for a re-payment plan.
Sell the property - If there is equity in the property & the seller acts quickly enough prior to foreclosure (talks to a Realtor) they should sell it. Make sure you are aware of the time frames before foreclosure so it's priced right & you don't take the first offer that comes along in a panic.
Rent the property - In some cases this might be an option, it might be a temporary solution though.
Refinance - If the homeowner has equity in the home and their credit hasn't been too badly damaged this might be an option. If the issues have been addressed as to why the homeowner became delinquent in the first place this would be a good solution.
Mortgage Modification- This is an option that requires the homeowner to qualify. It is similar to a low interest refinance where the lender lowers the interest rate on the existing loan in order to lower the payments.
Short - Refi - In a short-refi the mortgage is refinanced with a reduction in the principle & often the interest rate. A borrower will have to show a hardship & will have to qualify for a short-refi.
Deed-in-lieu of Foreclosure - Sometimes referred to as a "Friendly Foreclosure" is when the homeowner gives the deed back to the bank. This happens very infrequently but can save the mortgage company time and money of having to go through the lengthy and costly foreclosure procedure.
Bankruptcy - Sometimes this allows a homeowner to reorganize his debt and keep the property. If the homeowner does not make the payments after bankruptcy the home will still foreclose.
Servicemembers Civil Relief Act (SCRA) - This is a temporary relief that was put into place in 2003. Of course depending on your situation it is an avenue to reserach further.
and last but not least...
Short Sale - If all the above options don't work, pursue a short sale. A short sale is when the homeowner owes more than it is worth and negotiations need to be made with the mortgage company to accept less than the financed amount.
All of the above solutions in lieu of foreclosure make it clear the banks DON'T want the homes back. What they want is to help homeowners find a solution to foreclosure. If you need help avoiding foreclosure, call a Realtor.
Kristin Moran
Specializing in San Antonio & surrounding cities
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RE/MAX Access - Realtor®/Owner
KristinMoran@Remax.net 210.313.7397 www.SistersThatSell.com
Buy a home from me, use the truck to move for free!
