FORECLOSURE PREVENTION

These are strange and difficult times indeed! After a substantial boom in Real Estate values we now find ourselves in a stagnating market. Many buyers bought at the peak and now find themselves owing more on their homes than they're worth - and not just by a little.

If you consider some of the Mortgage practices of this recent boom when buyers were urged to get into the market at all costs, and some of the products sold to them, the situation is exacerbated and in addition to being upside down in their house, people are saddled with predatory mortgages - high interest rates resetting even higher.

Many homeowners are just walking away. But this is not a good strategy if you want to protect your credit profile for when times change.

If you're in a similar situation to the one described, all is not lost. You have several options which can alleviate your situation.

Option 1: MORTGAGE REFINANCE. Lenders are coming out of the woodwork finally and there is something of a refinance boom going on.

Option 2:  LOAN MODIFICATION. If you're unable to refinance, the next best option is to have your loan modified. This is somewhat more difficult because you have to prove the hardship, yet display an ability to continue paying if the terms are mitigated. The terms of your existing mortgage can be changed - interest rates, prepayment penalties, the term, late fees and charges can be rolled into the principal, and yes - sometimes - the actual principal can be reduced. Also, If you were the victim of a predatory lender, this option can be very successful.

Option 3: SHORT SALE. If all else fails, the last remaining option short of just walking away from the house, is to arrange a Short Sale. This is when the Lender accepts an amount for less than the value of the mortgage. They sometimes have to swallow large losses, but when confronted with the option of a foreclosure, it's sometimes more palatable. Of course you still have to find a buyer to pay the discounted price and this is where an aggressive sales strategy is valuable. 

Option 4: DEED-IN-LIEU OF FORECLOSURE. If you come to the conclusion that you will be unable to continue making payments on your house, even if the bank grants you a modification, the best course of action may be to give the bank the house back. This is called a Deed-in-Lieu of Foreclosure. It is similar to a foreclosure except the bank does not have to go through the judicial process thereby saving them time and money.

Option 5: SELL US THE HOUSE. We are active investors in the community and can possibly make an offer to buy your house within a very short time span.

I've just skimmed the surface on the options available to the distressed seller. The worst strategy of all is to do nothing. If you have been receiving letters from your bank, please respond. If your hardship is temporary, the bank may grant you a forbearance. But if your hardship is going to be of a longer term, please contact us. We are Mortgage Brokers in addition to being Real Estate Brokers. Nothing would please us more to enable you to stay in your home if that's what you truly want. And if you need to sell, well we can help there too!