So I talk a lot about short sales in my blog without addressing some other of the other options when attempting to stop foreclosure. I have decided to go over them in this and future posts.
The start of foreclosure comes with missing mortgage payments. When you start missing mortgage payments you feel backed into a corner and don’t see many options for yourself. When in reality you do a few different roads you can go down.
- Option 1 For Avoiding Foreclosure: The first option for avoiding foreclosure is the most obvious and most commonly used. It is to simply pack up and move out of you home. Forget about the house and your mortgage and just let the bank take the house back from foreclosure. Out of sight, out of mind. This is obviously not the recommended path for most as this will hurt your credit the most.
- Option 2 For STOPPING FORECLOSURE: A second option for stopping foreclosure is a loan modification. A loan modification can be very helpful for some. In a loan modification, you essentially ask the bank to lower your mortgage payments to a more reasonable amount of which you can afford. Essentially allowing you to keep your home and stay out of foreclosure. You do need to have an idea and some reasonable proof of a lower payment that would work and why. If a bank sees that they declined you for a loan modification they look at your short sale attempt in a different and better light.
- Option 3 For STOPPING FORECLOSURE: Our talk about loan modification lead us to this option and widely discussed route of negotiating a short sale. A short sale is obviously a popular route for stopping foreclosure. It makes the most sense if you just can’t stay in your home any longer. A short sale involves selling your home for less than what you owe on it. A short sale gives your more power than foreclosure. It allows you to control you deficiency and lower the hurt on your credit.
- Option 4 For STOPPING FORECLOSURE:The fourth option for stopping foreclosure is what’s called a died in lieu. A deed in lieu is exactly what it sounds like. You give up the deed to your home in lieu of foreclosure. This once again is an excellent option for stopping foreclosure but is quite a bit more difficult. A deed in lieu is very possible once your deal with your second lien. A deed in lieu never addresses the second lien. You would first have to negotiate with them to release your lien before you can proceed with a deed in lieu and stop your foreclosure.
Thanks for listening.
- Jeff Buettner
Real Estate Wiz Kid
Arizona Short Sale Realtor & Negotiator
I owe more on my Chandler home than what is worth… I need short sale help now !
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I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Deborah
http://termlifeinsurance2.com
Loan modification is a process whereby a home owner’s mortgage is modified and both the lender and homeowner are bound by the new terms of the new mortgage.
The most common loan modifications are listed below:
•lowering the mortgage interest rate
•reducing the mortgage principal balance
•fixing adjustable interest rates within the mortgage
•increasing the loan term throughout the mortgage
•forgiveness of payment defaults and fees
•or any combination of the above
Check out this Public site at http://LoanModificationMortgage.org
Jeff,
Very good basic advice. I think you hit the nail on the head with short sales. While they are unplesant they do substancially less harm then just packing up and leaving your home.
Deed in lieus work great if they don’t have a second or if the company in second position is willing to work with you. The problem is they usually arent willing unless you are months behind already.
Deborah,
Thanks for you extremely nice words and please continue to come back for more!
Sincerely,
Jeff Buettner