I am behind in my mortgage payments – what are my options?

If you have become delinquent in your mortgage(s) you will receive information – some not so subtle suggestions, from many people who want to take advantage of your situation and temporary misfortune! They may propose you solve your problem by suggesting you sell or deed your property to them.

Beware: Don’t do anything until you understand your options

Every homeowner’s situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Here are some of your options…

SELL YOUR HOME

You can sell your property if you have enough equity to cover all the costs associated with the sale or are able to bring cash to the closing table to cover any shortfalls. As full service real estate professionals, we can assist you with the sale of your property. Call for more details on how to get started.

A SHORT SALE

If you owe more than your home is worth, you can look at negotiating a discounted payoff with your mortgage company. We can negotiate with your mortgage company(s) on your behalf to get an approval for a “Short Sale.” Keep in mind the lender(s) almost always pays all the sales costs, including title and escrow fees, commissions and delinquent taxes.

REFINANCE

Refinance the property and pay off the existing loans. However, you must have sufficient equity in the property. We deal with lenders that can assist you with refinancing your property. Give us a call for further details.

LOAN MODIFICATION

In an effort to help distressed homeowners keep their homes, lenders are more willing to consider loan modifications. A loan modification or “workout” is a permanent change in one or all of the terms of an existing mortgage(s). These changes may include extending one or more of the terms of a mortgagor’s loan, a lower interest rate, an adjustable to a fixed rate loan and longer amortization period. The past amounts owed, including penalties and attorney fees, can be added to the balance of the modified loan. Give us a call for further details.

DEED IN LIEU

In a Deed in Lieu of foreclosure, the borrower conveys all interest in the property to the lender to satisfy the loan that is in default in order to avoid foreclosure proceedings. This is not a popular option for lenders given the depressed value of properties in many markets. The lender may also want you to agree to pay a certain amount in addition to giving up the property.

FORBEARANCE AGREEMENT

For those borrowers who experienced a very temporary event that caused them to fall behind on their mortgage, a Forbearance Agreement with the lender is a good option. According to this agreement, the lender delays his right to exercise foreclosure if the borrower could catch-up his payment schedule. In most cases, the lenders are looking for two things to consider a forbearance agreement.

1) Why the loan became delinquent in the first place. 2) The borrower’s financial difficulties have been corrected. The mortgage company wants to know that the borrower is now on a solid footing and can be counted on to make regular loan payments as agreed. The new payment will probably include a set amount that will count towards the delinquent amount.

DO NOTHING

This is an option, but not recommended. Sadly many go this route because the situation seems overwhelming or simply, they do not know what to do. We understand that you can become overwhelmed and intimidated by your situation; however, the consequences of a foreclosure are serious. At the very least, you owe it to yourself to consider all of the potential options that can help you avoid foreclosure.

Please call me should you have more questions or simply wish to discuss your options in detail.