The real estate market is rebounding which means that homeowners who were previously underwater are now regaining equity. While the status of homes in distress is trending in the right direction, many homeowners are still faced with hardships that prevent them from meeting their obligations. Homeowners facing hardships who act quickly are in a better position to find solutions in lieu of foreclosure. In fact, there are many options available to homeowners who seek the guidance of a qualified real estate agent early in the process. These options include:
- Reinstatement – bring payments current
- Forbearance or Repayment Plan – lender allows homeowner to repay back payments over a period of time
- Mortgage Modification – lender approves a modification of principal, interest or terms or a combination of these
- Rent the property – homeowner uses the rental income to pay the mortgage payment
- Deed in Lieu of Foreclosure – allows the homeowner to return the property to the lender rather than face foreclosure
- Bankruptcy – bankruptcy will only stall not stop the foreclosure process
- Service-members Civil Relief Act (military personnel only) – service members may qualify for relief under this Act
- Sell the Property – homeowners with sufficient equity can pursue this option
- Short Sale – allows the homeowner to avoid foreclosure thereby salvaging their credit. This keeps a foreclosure off the homeowner’s public record and avoids a deficiency judgment in many cases.
The short sale process is complex and requires a sufficient amount of time to be successfully completed. A short sale is a negotiation between the homeowner and lender to accept a payoff that will not satisfy the loan balance. A lender will consider a short sale when the homeowner can identify a hardship (loss of income, medical expenses, divorce, etc.), which prevents them from making their mortgage payment.
There are many options to avoid foreclosure but time is not on the homeowner’s side. Seeking the qualified advice of an experienced agent is the homeowner’s best defense to avoid the devastating effect of a foreclosure.
I understand the sensitive and confidential nature of a homeowner experiencing a financial hardship. Contact me today so we can work quickly to find the best possible solution for your family.
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