I want you to know all your options.  I and my team are not here just to sell your home, we are here to help in other ways to, if one of these works to keep you in your home, then we have done our job, if not we will guide you through the short sale process.

1.FORBEARANCE AGREEMENT

Ø      Homeowner has to qualify

Ø      Back payments are paid back over a 6-12 month period, and are paid in addition to the regular payment.

Ø      Usually requires an upfront fee to initiate this program equal to about 25-30% of the total accrued back payments

Ø      Usually a 90 day “trial” after which the lender will re-evaluate the borrower, at this point all past due payments could be called due.

Ø      Usually this is just a temporary solution…a homeowner should not do this if they really cannot afford the house any longer.

Ø      If you default on this program the lender can put your home into active Foreclosure, usually bank will suggest selling the home on a Short Sale.

 

2. LOAN MODIFICATION

Ø      Homeowner has to qualify

Ø      Back payments are tacked on to the end of the loan

Ø      This way was very uncommon, but given the state of the mortgage industry, it is becoming more common as banks are trying to become more proactive and keep as many loans performing as possible.

Ø      If homeowner defaults on this plan, they may not be reconsidered and home will be put into active foreclosure, usually the bank will suggest a Short Sale of the home.

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3. DEED-IN-LIEU OF FORECLOSURE

Ø      Lender agrees to take the Deed back to the house in lieu of foreclosure.

Ø      Homeowner has to get approved into this program just like a Short Sale.

Ø      Still VERY damaging to credit, but less damaging than a foreclosure.

Ø      Lender agrees to take on their debt and a second or any other lien on the property.

Ø      Lenders are becoming less and less willing to do this.

 

4. BANKRUPTCY

Ø      Can no longer go file bankruptcy the morning of the auctions to  pull house from auction list (New bankruptcy laws)

Ø      Please ASK your attorney about “Lift of Stay”

Ø      If homeowner fails to make a bankruptcy payment, then the house will go back into the hands of the lender and Foreclosure proceedings will begin, if homeowner does not want a Foreclosure on credit report, pursue Short Sale.