Alternatives to Foreclosure
Contact Susan at 530-328-1980 or email at:Susan@homeBuySusan.com
Your house is in foreclosure….what do you do?? Look at your situation without attaching your
emotions. You need a strictly business view point, then you can more successfully analyze the option that might best suit your needs.
REMEMBER: Time is of the essence, so sit and have serious thought of your situation, so you can have a quick action in order to allow yourself enough time to complete the chosen process.
TEN Options when facing Foreclosure:
1) Do Nothing: As a homeowner do nothing, means, most likely you will lose your home at a foreclosure auction. When trying to purchase again, loan applications generally ask if the applicant has ever been foreclosed upon. Your credit report also discloses this damaging information. Doing nothing is not the best option.
2) Payoff/Refinance: You could completely pay off the entire loan amount plus any default amount and fees. Usually, this is can be accomplished through a refinance of the debt. New debt is normally higher interest rate and there may be a prepayment penalty because of the recent default. You will want to make sure there is equity in the home, when choosing this option.
3. Reinstatement: You must completely pay the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.
4. Loan Modification: Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. The lender will request proof you have fixed the problems that caused the late payment.
5. Forbearance: A repayment plan based on the homeowner’s financial situation may be arranged through your lender. They, your lender, may even be able to provide a temporary payment reduction or suspension of payments. Information and possibly a trial period, will be required from the lender to show that you are able to meet the new payment plan requirements.
6. Partial Claims: A loan from the lender for a 2nd loan that includes back payments, costs and fees.
7. Deed in Lieu of Foreclosure: Give the property back to the bank instead of the
bank foreclosing. Banks may require you to first try and sell your home through
a Real Estate agent. Banks generally require the home to be well maintained, all
mortgage payments and taxes must be current. Most loan applications ask if this has ever happened.
8. Bankruptcy: This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy attorney.
Chapter 7 (Liquidation) To completely settle personal debt
Chapter 13 (Wage Earner Plan) Payments are made toward a plan to
pay off debts in 3-5 years.
Chapter 11 (Business Reorganization) A business debt solution
9. Short Sale: A Short Sale (also known as a pre-foreclosure sale) can be negotiated with your lender by the Real Estate Professional if what is owed is MORE than the properties value. (see information below on short sales)
10. Consult with a Realtor that Specializes in Short Sales. A realtor will look at your information, & based on your specific situation give you advice on your options. ( There is no cost or obligation by consulting with Susan ) Call her at 530-328-1980.