Saturday, August 9, 2008

Foreclosure Options

If you have not been making your mortgage payments and you are not in foreclosure yet or if you have already been notified of the law suite the bank is filing against you...

You need to know what your options are.

1. Loan Forebearance - The loss mitigation department of your mortgage company may make arrangements with you to pay some of the back payments including fees incurred by the bank. Typically you would make a large payment now and the balance in payments within a certain time period. You would also have to resume making your normal monthly payments.

2. Loan Modification - This a permanent change to your mortgage that may lower your payments and the delinquent payments may be added to the mortgage balance.

A loan modification and a loan forebearance is easier to arrange prior to the Mortgage Company filing a foreclosure lawsuit. Some lenders will not consider this after filing.

3. Reinstate Your Mortgage - You have up to and including the morning of the auction to catch up your payments and fees.

4. Refinance - You may have received letters from mortgage brokers and lenders saying you are pre-approved for a new mortgage. But it is very difficult to arrange new financing when you're already in default on your existing mortgage. Be very cautious about sending advanced fees to lenders or mortgage brokers. It's usually a ploy to take advantage of your financial situation.

5. Sell Your House - Many people today find themselves owing more than their house is worth. There is still hope! I can negotiate a "Short Sale" with the loss mitigation department of your bank. This means that the bank will accept less money than they are owed. I would also negotiate that a deficiency judgment not be filed against you. A deficiency judgment is when the bank pursues you for the amount of their loss. You will not be responsible for paying any fees, commissions, or closing costs. By taking action and preventing the foreclosure sale (or final judgment) your credit report will show "fully paid".

If this option fits your needs, it is important that you contact me as soon as possible. Whether you owe more than your house is worth or just need to sell contact me now.

6. Let Your House Be Sold On The Courthouse Steps - This is the worst option available to you! Some people feel - since there is no equity, just let the bank take it. Houses that are sold on the courthouse steps typically sell well below the market value. When a bank suffers a loss due to the pending foreclosure action against you, they have the option of filing a deficiency judgment against you. This means the bank can pursue you for the amount of their loss.

You have options!

via floridaperspectives

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