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Foreclosure Prevention Options
Don't give up your home without considering your options. A foreclosure will hurt your credit rating and make it difficult or impossible, to buy another home in the near future. If the proceeds from selling your home is not sufficient to cover the balance owed on your mortgage, your lender may file a claim for the remaining balance.
Here are some options you have available to save your home that some lenders offer:
Repayment Plan
A Repayment Plan will take the delinquent amount owed and divide that over 12 months. This will increase your mortgage for a short fixed term and will bring your mortgage current within 1 year.
Short Sale*
A Short Sale is when you sell your home for less than the balance owed on your mortgage. Many lenders will agree to accept a lesser amount than what you owe and will even forgive the remaining balance or deficiency of what is owed on the mortgage. This is a win-win situation for both you and your lender. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to sell the home for less than what is owed. This is extremely helpful if you are “upside-down” or you owe more than what your home is currently worth. Our experienced associates will prepare the documents necessary to begin the Shot Sale process, and submit the package to your lender
Deed in Lieu (of foreclosure) *
This option will assist you in escaping an overly burdensome mortgage. If a homeowner can't make the mortgage payments and can't find a buyer for the home, many lenders will accept ownership of the property. This is a good option since you are no longer responsible for a mortgage without the tarnish of a foreclosure on your credit. We are even able to assist in preparing an alternative option to the lender instead of having to add inventory.
Forbearance
To avoid foreclosure, the lender and the borrower can make an agreement called "forbearance". According to this agreement, the lender delays his right to exercise foreclosure if the borrower can catch up to his payment schedule in a certain time. This period and the payment plan depend on the details of the agreement that are accepted by both parties. The lender is most likely to agree to this if you can demonstrate that you will soon receive a bonus, tax refund, or some other form of lump sum payment cash.
* Short sales and deeds in lieu of foreclosure will no longer leave you owing taxes in some cases. In the past, the IRS considered forgiven debt to be taxable income. However, this was erased for situations where the loan was for a primary residence, by the "Mortgage Forgiveness Debt Relief Act of 2007," or H.R. 3648. Mortgage forgivness will end on 2012
Note: Each option is based on your specific situation. Please feel free to contact one of our specialist for details.
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