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| Facing Foreclosure? You Need to Know All of Your Options | February 3, 2010, 2:15 am | visits: 0 | wordcount: 635
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By Heather Dunlop
Many homeowners are facing foreclosure or struggling to make their mortgage payments in today's economy. About 50% of homeowners facing foreclosure do nothing and let the home go to foreclosure.
What do the other 50% do? There are many solutions available to homeowners who are struggling to make their mortgage payments (other than losing sleep at night).
Some solutions available are:
- Loan Modification
- Forensic Loan Audit
- Short Payoff Refinance
- Short Sale
- Bankruptcy
- or let the house go to foreclosure
How do you know what is the best solution for you? You need to speak with an expert who is aware of all these options so that you can get the advice that is best for your situation. Not all solutions will work for everyone.
A loan modification is an option for the homeowner who wants to keep their home. A loan modification is when the bank agrees to change the terms of the existing loan so that the homeowner can stay in the home. A homeowner can do a loan modification on their own. Just keep in mind that you signed the documents on the loan you have now and it isn't working for you, so you should consider having an expert handle the negotiation with the bank. The experts know the banks terminology and how to use that information to your advantage.
A forensic loan audit is when you have an expert review your existing loan documents to look for violations. The expert knows exactly what to look for to negotiate with the bank on your behalf. This is different from a loan modification because the expert is looking for violations, not just negotiating to change the existing terms.
Mortgage brokers will talk to you about a refinance. If you can qualify for a refinance, this may be an option for you. Just make sure you get a loan that is a long term solution not a band-aid. A short payoff refinance requires approval from your current lender, with them agreeing to take less than what you currently owe.
A short sale occurs when you sell your house for less than what is currently owed. This requires approval from all lienholders, including the bank, contractors liens, HOA liens, IRS liens, and more. Many realtors will tell you to do a short sale, because they are in the business of representing homeowners and home buyers. According to the National Association of Realtors, only 20% of short sale homes listed with a Realtor actually sell. You can sell your house directly to an investor who will buy the house, they are more motivated to get the deal done since they are the actual buyer of the house . A Realtor has to go out and find a buyer who is willing to wait for the bank to approve the short sale, which is very time consuming and why many short sale homes listed with a Realtor don't sell. Hint: contact a local investor who specializes in short sales to get the house sold.
A bankruptcy attorney will tell you to file bankruptcy. A bankruptcy will stay on your credit report for more than 7 years, so be very sure you want to do this. Also keep in mind, when you are in bankruptcy you have to make payments according to the court order. If you fail to make the payments, your house can still be foreclosed upon.
Your last option is to do nothing and let the home go through the foreclosure process. This means you will have a foreclosure on your credit report for at least 7 years and no house.
So, how do you decide? You need to know all of your options and what is available to you, so you can make an informed decision. Speak with an expert who is able to discuss all of your options, not just one of them.
Heather Dunlop specializes in buying and selling short sale homes, and provides information to homeowners about all of the options available to them. Request a Free Consultation with our legal partners at http://www.housebuyerseattle.com/?page=5825
Source:www.isnare.com | |
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