(*NOTE: this is a reprint from online sources---the best advice I can give you is to seek expert legal and tax advice to see how any of the following may affect you personally)
“RealtyTrac, a group that monitors the foreclosure market, speculates that as many as 1 million foreclosure actions that were slated for 2011 will be bumped to 2012. The reason for the holdup is due in part to the dismal housing market as well as persistent foreclosure abuses on the part of the country’s largest banks.” (A Glut of Foreclosures to Flood the Market in 2012 by Lawyers.com)
With foreclosures expected to grow and an economy that continues to stagnate, 2012 promises to be another difficult year for homeowners. If you’re one of the one million homeowners in danger of losing their home next year, there’s no time like the present to begin looking at ways to avoid a mortgage foreclosure. From lawyers on JD Supra, here are six alternatives you should consider:
1. Sell your house
"A short sale occurs when the homeowner obtains the lender’s permission to sell the home for less than what is owed to the lender. This leaves the lender ‘short’ on what is owed. Typically a lender agrees to a short sell because a moderate loss is better than the costs involved with a foreclosure action. A homeowner must beware, however, that a short sale does not eliminate the borrower’s liability for the deficiency, which is the remaining balance left on the loan after the home is sold. In order for the deficiency to be written-off by the lender, the homeowner must negotiate it prior to the short sale.” (Facing Foreclosure? Consider a Short Sale by Dan Dodds)
2. Renegotiate your mortgage with the lender
“You have the right to negotiate a mortgage modification directly with your lender. You should not have to go through an intermediary to negotiate your mortgage. Instead, go directly to your lender… Nothing is guaranteed; it all depends on your negotiation with your lender.” (Home Loan Modification Tips by Tampa Bay Bankruptcy Center, P.A.)
3. Apply for a loan modification program
“HAMP provides eligible borrowers with a chance to modify their first / primary mortgage loans to make them more affordable on a monthly basis… Qualified borrowers who apply and are able to make it through the challenging process should be rewarded by one or more of the following: an interest rate reduction, a loan term extension, a principal forbearance and/or a reduction in the actual principal of the loan (extremely rare).” (A Summary of Government Mortgage Loan Relief Programs by Jason McGrath)
4. Give your house back
“Under [the deed-in-lieu of foreclosure] scenario, a borrower deeds the property to the lender in satisfaction of the secured debt. Essentially, the borrower and lender work out an agreement to turn over the property to the lender. There is no obligation on the part of lenders to accept the property in satisfaction of the loan amount.” (Should I Stay or Should I Go? Options for Underwater Homeowners in California by Tubman Law Group)
5. File for bankruptcy
“A Chapter 13 bankruptcy will stop the foreclosure sale that is set on your home and allow you to put together a plan whereby you can pay the missed payments. Further, you will be given three to five years to catch up on the missed payments. A Chapter 13 plan can make an impossible situation like getting all of your missed payments caught up at once into a more manageable situation where you pay a portion of the missed payment back over time.” (Bankruptcy & Foreclosure: Dealing with Your Home Through Bankruptcy by John Skiba)
6. Walk away
“A strategic default occurs when a homeowner who can afford the mortgage payments decides to simply stop making them, forcing the lender to foreclose on the home. In most cases, people who pursue a strategic default have done the math and determined that it no longer makes financial sense to own the home.” (Strategic Defaults: Making a Calculated Decision to Lose Your Home to Foreclosure by Lawyers.com)
No comments:
Post a Comment