How to avoid foreclosure

Many families are going through financial hardships and they are unable to make their mortgage payments and is now facing the possibilities of having their home foreclosed.  When a borrower believes that they will not be able to make their payments on their mortgage, the first thing they should do is call the lender and apply for a loan modification.

If you are facing foreclosure, you do have options.

1.  Sell your home.  If there is enough equity in your home you can sell to avoid foreclosure.  If your property does not have equity, you can bring the balance of the loan to closing to settle the debt.  When bringing cash to closing it is strongly suggested that you contact a tax professional.

2.  Deed In Lieu of Foreclosure.  A borrower will agree to trade their property back to the lender if they will cancel the mortgage note.  If you live in a state where the foreclosure takes a significant amount of time, this may be an alternative for you.  When considering this option please consult a attorney.

3.  Loan Modification.  A loan modification allows the borrower to make reduced mortgage payments with lower interest rates if approved by the lender.

What if I don't get approved for a loan modification and my home is worth less than market value?

If none of the options above apply to you, you may want to consider having your home sold as a Short Sale to avoid foreclosure.

What is a Short Sale?

A Short Sale happens when a borrower is no longer able to make payments on their mortgage and the lender (the bank) allows the home to be sold for less than what the borrower owes on the loan.

How do I qualify for a Short Sale?

You may qualify for a Short Sale if:

1. You are a month behind in your mortgage payments.
2. You have depleted your savings.
3. You or your spouse have lost a job and your financial situation has changed.
4. You can prove that you will not be able to make the next mortgage payment.
5. You have been denied a loan modification.

Items that you will need to proceed with a Short Sale.

1. A hardship letter explaining circumstances.
2. A financial worksheet.
3. A copy of the last two months bank statement.
4. A copy of your last two pay stubs.
5. A copy of your last two years tax return.
6. A copy of your unemployment.
7. A copy of your 401K and/or retirement account statement (if applicable).
8. An authorization form giving permission for your agent to process the Short Sale.

  If you are interested in learning more about how to sell your home as a short sale send me an email requesting more information about short sales lorinda@thebesthomesinva.com or call me at 757-748-2194.  All request will be taken in confidence.

If you are ready to get the short sale process rolling, call or email me, I am ready and willing to help.  No matter what state you live in, I can help.