Avoid Foreclosure
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We’d like to assist you! Allow us to be the one you can rely on to provide you with clear guidance, so you can decide what’s best for you. For no charge, we will assess your case and assist you in finding the best solution. Using good judgment and a little imagination, we will discover what is best for YOU.
You have options when facing foreclosure:
We are your lifeline in these challenging times. Explore our foreclosure rescue services and reclaim control of your financial future.
1. Loan Modification:
A loan modification simply means to change or modify the terms of your original loan.Several types of loan modifications may be available to you depending on the type of loan you have (Conventional, FHA, VA, etc.) and who is holding your loan. In some cases, this can be having the payment reduced and/or having some or all of the delinquent payments added to the end of your loan. Loan modifications are not automatic and you have to qualify to receive one.
Different organizations may get in touch with you in an attempt to “assist” you in obtaining a loan modification. They almost all want an advance payment, often in the thousands of dollars, without no assurance that the adjustment will be made. Dealing with such individuals should be avoided at all costs. They don’t want to assist you—they just want your money. You can deal face-to-face with your lender, but you should always be very skeptical of what they say. Get whatever you are taught in writing instead of taking it at face value. Check with the Public Trustee to confirm their claims if they say they are postponing the foreclosure. Many times, upon speaking with their lender, borrowers believed their foreclosure had been postponed or canceled, only to learn later that their house had been auctioned off.
Remember, only a small percentage of loan modification applicants receive approval. In the unlikely event you are approved for a loan modification, there is a 5 to 6-month trial process. During this time, if you are even 1 day late or $1 short, you will be immediately accelerated back into foreclosure. Again, only a small percentage of applicants are approved, and even a smaller percentage make it through the trial period, therefore ending up back in foreclosure, further in debt and with less chance of being bought out by a cash buyer.
2. FORBEARANCE AGREEMENT:
If you don’t qualify for a loan modification, then the Forbearance Agreement may be better for you. The Forbearance Agreement is a worked-out agreement with the bank. Here is how a forbearance agreement works.
In addition to legal expenses, the bank will want between 40% and 50% of the overdue payments. Your monthly payment will increase for the next six to twelve months due to the equitable distribution of the outstanding balances between the six and twelve payments. The payments will then revert to their previous, lower amounts at that point. Keep in mind these two crucial points:
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- 90% of homeowners fall out of their forbearance agreement in the first 2 to 3 months because of failure to pay.
- Just because you worked out a deal with the bank, doesn’t mean you’re out of foreclosure. You are still in foreclosure until your increased payments are made. Then, and only then, will you receive a foreclosure withdrawal letter from the bank, stating your loan is current. In the meantime, the bank will keep extending the foreclosure sale date every month.
3. REFINANCE YOUR MORTGAGE:
You will find it unlikely to be approved for refinancing your mortgage if have been late on payments or in foreclosure. Additionally, the current interest rate market doesn’t serve you well to refinance unless your original mortgage was acquired in a previous high-rate market.
4. DEED IN LIEU OF FORECLOSURE:
The deed in lieu of foreclosure is when you give ownership of your home and deed it back to the bank. It is unlikely that this is a good option for you. The bank could still place a foreclosure on your credit and you could end up with a 1099-C sent to the IRS for additional income if the bank sells the property for less than what you owe.
5. SELL YOUR HOME TO A REAL ESTATE AGENT:
Remember, you have to disclose to your listing agent that you are behind in payments or in foreclosure. It normally takes 30 to 45 days to close, even though your listing agent signed a deal on your home today.
You won’t be able to choose this if your foreclosure date is earlier. If you’re not willing to sell your house for far less than its market value, you might not be able to list it with an agent at this time. The closing process will take 30 days, even if the price is less than the market.
We do have connections to expert realtors who can work with you in this short period.Make sure that everyone you work with puts everything in writing, including a way you could get out of the contract without any further damage to you or your situation.
6. SELL YOUR HOME TO A CASH BUYER:
This could be one of your best options. We will buy your home outright. We will buy your home from you, and pay off the balance and all late back payments, when possible placing cash in your hands.
7. SELL YOUR HOME SUBJECT TO:
You, the homeowner, will convey the property to us by Warranty Deed. In exchange, we will pay all of your late payments to make the mortgage current. We will make the monthly mortgage payments until the property is sold or refinanced, whichever comes first.
Next, in order to safeguard both your and our interests, we shall file the deed at the courthouse. Once the property is deeded to us, we will pay you the agreed upon payment and schedule a time for you to leave the premises. This approach aims to relieve you of the monthly debt by having us take over the present loans, make the payments current, and keep them current for the term of our agreement. Your credit will improve over the length of time we handle the payments on your behalf.
In every option, including this one, make sure that all parties involved are made aware of the details of this transaction. Remember, your name will remain on the mortgage and we will be making the mortgage payments on your behalf.
8. DO NOTHING AND LOSE YOUR HOME:
In a foreclosure, your home will end up selling at auction. Shortly after your home is sold at the auction, a Sheriff’s Deputy will show up at your house to remove you, your family, and all your belongings.
You might think of a foreclosure as an atomic bomb being dropped on your credit. Your credit will undoubtedly take a knock and you will probably not be able to get new credit cards, a new car, a new job, another house, or even rent an apartment after this.Your credit will be affected by a foreclosure for seven to ten years.
Now that you know a little more about your options, please call us today to discuss them in-depth and learn which one will be best for you and your family. Please contact an attorney for legal advice, an accountant for tax advice, and a mortgage broker for loan information/questions.
Our mission is to give you the knowledge and understanding you need to help you make an informed decision. Contact us today at (303) 219-0113.