Real Estate Broker Extraordinaire
Congratulations for taking the first and most important step to your mortgage resolution!
Many homeowners are not aware of so many programs they have available to them so they choose to do nothing. This is why we congratulate you for taking this important step which is a ‘Fact Finding’ mission for you, the homeowner.
In this manual you will learn ALL of the solutions to mortgage default far beyond the standard Short Sale or loan modification. After reading through all the solutions let’s then choose what best fits your goals. There are even some programs that may give you cash just for taking action!!
Please send me an email to request the manual in it’s entirety, then we can customize a REALISTIC program to satisfy your goals as a homeowner.
Congratulations again for taking this first important step!
A2Z Homes Inc.
The 9 Ways to Stop Foreclosure
During my years working with ServiceLink, an affiliate of Fidelity National Financial a Fortune 500 Company, in their Pre-foreclosure and Short Sale Solution Division. I spent several years travelling throughout the United States twenty-eight days a month, meeting face-to-face with the lenders and servicers, and discussing the best and the worst pre-foreclosure solutions. Now you can learn everything I have to share including all the options available to you. If YOU are facing foreclosure, you can take action through insight and start immediately on the path to a brighter future.
As we go down the list of options, remember that the damage done to your credit increases, with one exception, #9. But, credit damage depends on a number of other factors too, so get legal and tax advice before choosing which path to take.
So, let’s get started.
- Loan Forbearance- If you are anticipating a temporary hardship in the near future, but so far you haven’t missed any payments, contact your bank immediately. Because you are being proactive, the lender may actually be willing to arrange a forbearance plan, also known as a repayment plan. This allows you to delay payments for a short period of time, even up to several months, and then add a portion of the missed payments onto your regular payments when they resume. Usually, the goal is to repay the late amount over 6-12 months.
- Loan Re-instatement- If you’ve already missed payments, you’ve probably also accrued late fees and attorney fees. But if you DO have funds available to pay off the delinquent amount plus the miscellaneous added costs in 1 lump sum, ask for a loan re-instatement. This returns your loan to a current status. Your credit will suffer, but usually much less than with most of the other alternatives. Remember, fees often equal, or even exceed the total of the missed payments, so be prepared for a significant outlay of cash.
Do NOT ignore the lender’s mail or phone calls. This will result in even more legal and other fees, making the problem even worse.
- Loan Modification- If you don’t have the cash to reinstate the loan, but you would like to stay in your home IF ONLY the payments were more affordable, talk to you lender about a loan modification. Ask about the government programs that are available, as well as any “in house” programs which the lender may offer. It’s important to understand that this process can takes months and usually doesn’t stop the foreclosure time clock. So, stay in touch with the bank regularly, stay positive, stay assertive, respond quickly to whatever they request and finally, recognize that any change in your payment or interest rate comes at a cost. The length of the loan is usually extended and any missed payments plus attorney’s fees are added on the back end.
- Short Pay Refi- Some lenders, working in conjunction with the government, offer refinance programs so you can lower your interest rate. You must qualify for these programs, so they aren’t for everyone. But, even if your house is underwater, some programs allow the homeowner to refinance up to 110% of the homes current value, often at interest rates much lower than the current loan. In some rare cases, a portion of the current loan balance may be forgiven.
- Renting Out Your Home- In some cases it may make sense for a homeowner to move out of their home and into a less expensive rental property, while renting out their own home. For example, if your home will rent for enough to cover, or nearly cover, your house payment AND you can find a suitable rental for substantially less than your house payment, this may work as a temporary solution until your hardship passes.
- Qualified Written Request- As a result of the securitization of mortgages, sometimes the servicers of mortgages, as well as the investors who bought the mortgage backed securities, do not possess the actual Note securing your mortgage. They were lost, or simply not transferred properly. Technically that means the servicer, or more properly the trustee, cannot legally proceed with a foreclosure. They have no standing. This is what the whole “robo-signing” scandal is about. Servicers and their trustees have forged documents to “prove” that they hold the Note and therefore have the right to foreclose. However, attorneys and even homeowners have had some success challenging the servicers to prove whether they actually have the Note in their possession. You do so by filing a Qualified Written Request with your servicer. In cases where the servicer is unable to prove possession, the foreclosure action has either stalled temporarily or been dropped altogether. You can learn more about this process at www.hud.gov
- Deed in Lieu of Foreclosure- Next, deed-in lieu is the process of giving the bank the deed to the home and you surrendering all interests in the property. This releases you from your obligation for the mortgage debt. Although it sounds like a simple, painless alternative to foreclosure, the credit damage of a d-i-l is essentially no different. And, if there is a second mortgage on the property, a d-i-l won’t work.
- Bankruptcy- In a Chapter 7 bankruptcy, you will not be able to keep your house. However, the mortgage debt is usually wiped out once and for all and although it is a long road, you can begin to re-build your credit. On the other hand, if you know your hardship will end at some point but foreclosure is imminent, and you just need more time, talk to an attorney about Chapter 13 bankruptcy. This will absolutely stop the foreclosure process, as long as you are under bankruptcy protection. Chapter 13 may allow repayment of the overdue payments at a much more affordable level and sometimes strips other debt from the property. I’m not an attorney, and I’m not offering legal advice, so consult an attorney to get advice about your specific situation. Again, Chapter 13 will buy you more time but it can severely damage your credit, especially if you don’t stick to the court appointed re-payment plan.
- Short Sale- OK, now we come to a little more hopeful bit of news. Let’s talk about short sales. A short sale is often the best, least damaging option, credit wise. If you’ve looked at all the other options but none of them seem to fit, AND you know you can’t keep your home, DON’T GIVE UP! Don’t let despair drive you towards foreclosure. Talk to a knowledgeable real estate agent today (Me) about doing a no cost short sale. Some banks even PAY YOU to do a short sale!! In a short sale the bank allows you to sell your home for less than what you owe. In many cases, when assisted by a competent real estate agent, a homeowner can walk away from a short sale owing nothing more, without a deficiency for the difference between what the home sold for and what was owed on the mortgage.
Short sales are also the only chance you have to settle with 2nd lienholders in most states including California, where 2nds and HELOCs don’t go away in foreclosure. They have deficiency rights! Short sales aren’t always easy, but I can assure you that a little patience now is worth it. When the short sale is closed, you can start on the path to a brighter future. Not so with foreclosure.
Let’s not even consider foreclosure an option. DO NOT burry your head in the sand thinking your bankruptcy attorney is going to bail you out. Avoid foreclosure and avoid a bankruptcy in most cases as well. Did you know that without a doubt the following are true in California foreclosure:
- It is the most damaging item on a credit report, far worse than a repossession or even bankruptcy.
- You can still be sued for a deficiency judgement even after you have been foreclosed on.
- You will receive a 1099A (Abandonment) from your foreclosing lender.
- You are less of a job candidate than someone who does not have a foreclosure on their credit.
- HOA liens can still come back and sew a homeowner for late HOA fees.
- You will likely not get the financial moving incentive you could get in a Short Sale.
- In foreclosure you could be victim to a ‘Martial Lock Out’ this is where the police remove you and arrest you for trespassing if you still do not leave the home.
- If you avoid Foreclosure you can purchase a house again within one year.
OK, so now that we’ve covered all the options, I hope you feel a little clearer on what direction to go.
The most important thing I want to impress on you is this- DO SOMETHING! Don’t just let the bank foreclose! Do this on your terms not the banks. Let A2Z Homes Inc. help you through this process with the highest level of dignity.
Foreclosure doesn’t solve your problems. In fact, foreclosure will likely haunt you and your credit for the next 7 years! Did you know that last year 80% of the people who lost their homes to foreclosure NEVER talked to anyone who could help them- not their lender, not an attorney, not a Realtor®? Don’t be one of those statistics.
Learn more about all your options by visiting www.hud.gov You’ll be glad you did. You’ll find tons of FREE information on all the alternatives to foreclosure, as well as why Christopher Rockey is considered the top Short Sale agent in your area.
Visit www.hud.gov and make the right choice today, so you can enjoy a much brighter future tomorrow.