If You Need To Stop Foreclosure
Every foreclosure is the result of someone’s personal loss, and can be the opportunity for someone else’s profit. Many foreclosed properties end up being sold to their new owners at a steep discount to their fair market value, making them tempting targets for real estate speculators. But no matter how you view foreclosures, you must admit that with the failure of the US housing market, the foreclosure market will be expanding at a fast and furious rate.
Don’t Waste Time
If you are one of the millions of US homeowners facing foreclosure, you will be much better off if you confront your difficulties head-on and look for ways to stop foreclosure, than if you simply walk away from your home. But you don’t have all the time in the world to figure out which alternative to stop foreclosure will work best for you, so you should begin your research immediately, by talking with your lender.
Work With Your Bank
You may be astounded to learn that if anyone wants to stop foreclosure on your home even more than you do, it is your banker. If you are three or more months behind on your mortgage payments, your bank will be ready to start foreclosure proceedings, but still prepared to negotiate. Why?
Because banks are in the mortgage business to make money and any bank which forecloses on a property will have to pay to maintain and insure it until it can be resold. The longer it sits empty, the longer the bank will be losing money on it. So your banker is the first person you should talk to about finding a way to stop foreclosure on your home, because he or she will be motivated to keep you in it.
One way to stop foreclosure is to find a lender who specializes in loans to distressed homeowners, allowing you catch up on your mortgage payments while you negotiate a long-term loan at a more favorable interest rate. If you can do this, you will have lower mortgage payments in the future.
Other Options To Stop Foreclosure
If you are unable to find a lender, you can stop foreclosure by getting your bank’s permission to sell your home at below market value, because the bank might be willing to settle for a part of what you owe them in the near term, instead of having to wait out the foreclosure process before seeing any money. You’ll still lose your home, but being able to stop foreclosure will protect your credit rating and make it much easier for you to qualify for a future mortgage.
As a final suggestion on how to stop foreclosure, ask your lender for permission to pay only the interest portion of your monthly mortgage payments until your financial situation improves. Using this method to stop foreclosure is a short-term solution at best, but it may be enough to let you get caught up and save both you and the bank the nightmare of a foreclosure proceeding.
By: Jonathan Andrew
About the Author:
You can also find more info on foreclosure prevention and foreclosure refinance. Myfinancialbliss.com is a comprehensive resource to get your all financial solutions.
Categories: Foreclosure Refinance Tags: facing foreclosure, Mortgage Business, Time In The World
How to Work With Loss Mitigation and Avoid Foreclosure
If you are facing foreclosure, the first thing you need to do is contact the Loss Mitigation Department of your mortgage lender. A Loss Mitigator will be assigned to your account and will work with you to determine what, if any, options are available to help you avoid foreclosure. The main function of a Loss Mitigator is to devise a plan that will allow the borrower to remain in their home.
Prior to contacting Loss Mitigation, organize your financial records and create a list of income and expenses, along with a proposed repayment plan. If you have the means to get caught up on your mortgage loan, your lender may offer you a Loan Modification or Forbearance Agreement.
Typically, loan modifications consist of rolling over past due payments to the end of the loan, or temporarily reducing monthly payment amounts. Oftentimes, the unpaid monthly payments are placed at the back of the loan, meaning the homeowner will wipe their current past due balance clean. However, they will have to make payments on their mortgage note for an additional one to three years.
If you are unable to become current on your mortgage payments, the Loss Mitigation Department may accept what is known as a Short Sale. This process involves selling the home for less than is owed on the loan. For instance, if you owe $100,000, the lender may allow you to sell the home for $95,000.
Short sales can be somewhat tricky, so it’s a good idea to work with someone familiar with the process. It’s also important to note that the IRS may charge tax on the difference between what was owed on the house and what was received. Using the example above, this means you might be charged tax on the $5,000 difference.
Currently, banks are only accepting about one out of ten short sale requests. The reason for such a low acceptance rate is the fact that many people do not submit all of the required documentation. Since it is the job of the Loss Mitigation Department to keep losses to a minimum, most won’t even consider short sell offers of less than ninety-five cents on the dollar. Many real estate experts suggest lenders will be forced into accepting sixty-five to seventy cents on the dollar in the near future. Reason being is the massive amount of foreclosure properties in America.
Finally, if you are unable to obtain a loan modification or short sale, the Loss Mitigation Department might allow you to give the house back to the bank using a strategy known as Deed in Lieu of Foreclosure.
In order to qualify for a Deed in Lieu of Foreclosure, you must exhaust all other options including attempting to sell your home. While this arrangement will not save your home from foreclosure, it is not nearly as damaging to your credit report.
If you are facing foreclosure, take time to become familiar with the options available. Doing so can help you better negotiate with the Loss Mitigation Department. Keep in mind that lenders want borrowers to stay in their homes and make their mortgage payments. If you make a concerted effort to bring your mortgage payments current and are willing to do whatever it takes to save your home, chances are good you can avoid the foreclosure process altogether.
By: Simon Volkov
About the Author:
Simon Volkov, private Real Estate Investor, helps individuals who need to liquidate their real estate. If you are facing foreclosure or would like to learn more about loan modifications, short sales or deed in lieu of foreclosure options, visit www.SimonVolkov.com
Categories: Loss Mitigation Tags: facing foreclosure, Losses, Mortgage Loan
