Options & Solutions for Homeowners in Foreclosure

The current US housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options for foreclosure are many; following is a brief explanation of these solutions.

REINSTATEMENT                                                                                                             A reinstatement is the simplest solution for a foreclosure however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale. 

 +  Does not require Mortgage Company of lender's approval.

 -   Requires that a homeowner be able to pay all back payments, fines & fees immediately.

FORBEARANCE OR REPAYMENT PLAN                                                                           A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

MORTGAGE MODIFICATION                                                                                            A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan the term of the loan or all or any of the above. This typically results in a lower payment to the homeowner and a more affordable mortgage.  

RENT THE PROPERTY                                                                                                     A homeowner who has a mortgage payment low enough that market rent will allow it to be paid can convert their property to a rental and use the rental income to pay the mortgage.

BANKRUPTCY                                                                                                          Bankruptcy has been marketed by many as a ‘foreclosure solution’ which in some states and situations it can be. If the homeowner has non-mortgage debts whose payments are causing them to fall short of paying their mortgage payments and a personal bankruptcy will eliminate these debts this may be a viable solution.  

REFINANCE                                                                                                                      If a homeowner has sufficient equity in their property and their credit is still in good standing they may be able to refinance their mortgage.    

SHORT SALE                                                                                                                    If a homeowner owes more on their property than it is currently worth then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: payment increase, job loss, divorce, excessive debt, forced or unplanned relocation and more.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Download the complete report Options and Solutions for Homeowners in Foreclosure.

Please call us today for a free confidential evaluation of your individual situation, property value and possible options.