If you are dealing with the stress of facing a foreclosure there are some options below.
Thousands of people have found themselves facing foreclosure. There are options! Foreclosure should not be anyone's option.
A foreclosure on your credit record will cost you thousands of dollars long after you lose the home. Every time you apply for credit the foreclosure will be on your credit report. Every time you apply for a loan the interest rate will be higher. You can avoid foreclosure but you have to know your options and work hard once you choose the right option for you.
On this website I hope you find answers to your questions. Please don't hesitate to contact me and I will try to direct you toward the right company or person that can assist you.
You can avoid foreclosure and it is worth every bit of extra effort.
Mike and Frances Healy, Associate Broker RE/MAX
Center, CRS (Certified Residential Specialist)
Certified Luxury Home Marketing Specialist (CLHMS)
Top 1% of Residential Real Estate Agents Nationwide
Phone: Mike: 678-804-2487, Frances: 678-804-2486
E-Mail: mike@mikehealy.com, Web Site: mikehealy.com
We have been Realtors for over twenty years. The current real estate market has affected everyone. When a foreclosure occurs it affects the value of everyone's property in the community. Foreclosures drive down property values. I decided to launch this website to help homeowners understand their options and avoid foreclosure.
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2 Options
There are two (2) options.
Keep in mind that lenders do not want your property. They want either your payment in a timely manner or they want to end the loan. Lenders are currently overwhelmed with foreclosures and pre-foreclosure properties. Lenders are adapting to the economy and open to options to avoid foreclosing.
There are two simple options.
Bring your mortgage account current. Either pay all money owed or renegotiate the terms of the loan with your current lender(s). Lenders will consider changing the terms of your loan if you can show the ability to make the payments under the new loan terms. Sell your home. Lenders are willing to take less than what is owed. Why would a lender agree to take less than what is owed? Foreclosure is expensive for the lender and takes time. If you can sell your home the lender will avoid the cost of foreclosure and your home should sell for a higher price than after foreclosure. The term is called a short sale.
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Get Organized
The better prepared and organized you are the easier the process will be. Keep in mind that the lenders deal with thousands of loans. Each loan is different no two loans are the same. Everyone will need your loan account number in order to assist you.
The process is very similar to when you purchased the home. The current lender will want to look at the same information. If the loan can be restructured it will be based on your current income and your current bills.
If you determine that the best course of action is to sell the home. The lender will still want financial information from you in order to release you from the loan and avoid foreclosure.
Having everything together will speed the process along.
You need to start by gathering the important information that will be needed.
Account Number(s) Copies of your payment(s) statements The documents you received when you purchased (If possible) Paystubs for the past 2 months (If possible) A simple but accurate list of all your bills Current Bank Statements WARNING!Whenever you Make Copies...Using a black marker!Mark through your social security number on all forms...It is now common that you will be asked for the last four digits only.
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Possible Loan Options
Offered by Your Current Lender
These terms are not universal - Lenders may have these programs but may have a different term for the loan option. Forbearance maybe called a Moratorium. Keep good notes so that when you talk with your lender you're talking in their terms.
Reinstatement - occurs when the lender allows the borrower to repay the total balance due on the late house payments in addition to making your monthly house payment. Partial Reinstatement - allows you to pay at least one-half of the back payments first and set a repayment plan for the rest of what you owe. Repayment Plan - is an option that allows you to make the regular mortgage payments plus an additional amount towards the back payment until you are caught up (usually no longer than 12 months). Forbearance - occurs when the lender agrees that for a limited amount of time, you don't have to pay or that you pay a reduced monthly payment. Once the agreed time period is over, you must pay all current and late payments. Loan Modification - is used to change the terms of your original mortgage. This means the lender agrees to change the terms or payment amount of your loan. In the case of an adjustable loan the lender may lower the interest rate or lock the rate. The lender may extend the length of the loan from a 30 year loan to a 35 or 40 year loan. Refinance - is when the lender agrees to provide you with a new loan. Please keep in mind you need to have all of your financial information together when you pick up the phone. Be patient and courteous to the person on the other end of the line.
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Restructure the Loan
Keeping Your Home
Lender(s) are willing to restructure loans to keep you in your home. You must be able to demonstrate the ability to repay the new loan. This is why it is so important to have all your financial records organized.
Keep these lending terms and guidelines in mind when dealing with your lender.
Front Ratio - The percentage of! mortgage payment verses your income
Example: Monthly Payment of $1500.00 Monthly Income of $5000.00 Before Taxes Divided Payment into Income!This example equals 30%
The ideal number would be less than 28%. Above 28% doesn't mean an automatic rejection.
Back Ratio - Works the same as the front but you include all loan payments divided into the monthly income.
Example: Monthly Payments All Loans $2200.00 Mortgage, Car Loan, Credit Cards Monthly Income of $5000.00 Divided Payment(s) into Income!This example equals 44%
The ideal number would be less than 41%. Above 41% doesn't mean an automatic rejection.
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Selling Your Home When You Owe More Than It's Worth
If you feel that foreclosure is unavoidable...Then you should strongly consider selling to avoid foreclosure. Lender(s) would prefer to work with you and take less than you owe than foreclose.
The term is Short Sale.
Short sale is when the lender agrees to take less than what is owed. Your credit report will reflect the late payments. But instead of showing a "foreclosure" your credit report will show "paid as agreed". This will show future creditors that you worked with the lender opposed to just walking away from the problem.
A short sale will have a negative effect on your credit report.
Why will a Short Sale Work?
Under a Short Sale you will set a price in line with recent sold properties in your area. The price maybe below what you purchased the home for.
How will all the fees be paid?
All the costs of selling the home will be paid when the property closes. The real estate commission, closing cost, association fees and attorney fees are paid. The balance of the money will be paid to the lender.
You don't write a check at the closing.
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You need an experienced Realtor. You need Mike and Frances Healy.
We can help you because we understand the process the process to help you get your home sold and avoid foreclosure and because we have the training and the experience of having successfully negotiated many short sales. Please do not hesitate to contact us to discuss your options.
Mike and Frances Healy, Associate Broker RE/MAX
Center, CRS (Certified Residential Specialist)
Certified Luxury Home Marketing Specialist (CLHMS)
Top 1% of Residential Real Estate Agents Nationwide
Phone: Mike: 678-804-2487, Frances: 678-804-2486
E-Mail: mike@mikehealy.com, Web Site: mikehealy.com
