What Are Your Options When Facing A Foreclosure
We appreciate your giving us the opportunity to help you. When faced with a possiblke foreclosure the options you have are as follows:
1) Loan Modification - First off, NEVER pay someone to do this, as the lender will work directly with you at no charge. You could try to renegotiate your loan directly with the note holders. The drawback is that they more often than not just keep you hanging out there as long as they can and say no. I have had them tell my clients no even after they called and said "you qualify for our loan renegotiation program." If they do agree, which in my experience doesn´t happen as often as they say it does, the only thing they usually agree to do is give you a temporary change in interest rate, term or a temporary change in payment amount which can be tacked on to the principle. Read any such proposal CAREFULLY . Though it is now more common for the lender to consider it, unless you fall directly into the guidleines of one of the government backed programs, they usually will not adjust your balance. Meaning that if you do all of that, you still end up with a debt larger than the asset that secures it. Again this is something you can do with your lender directly and should not have to pay for. Keep in mind though that according to recent court decisions, any forbearance agreement needs to be in writing to be enforceable. So no matter what the outcome of your conversations are if they don´t give it to you in writing, it doesn´t exist. Also in the loan mod situation, you should find out if your mortgage is Fannie Mae or Freddie Mac backed. If it is then you may have the ability to work with your lender a little more than if not. For more info go to the following link: www.financialstability.gov
2) Foreclosure - This is usually a last option. So long as all you have are purchase money loans, meaning you haven't pulled money out for other purposes, and all of the debt was used to purchase the home, they can't come after you for the shortfall. If there was other uses for the money like, you refinanced and pulled your equity out to pay for something else, they may be able to come after you for the debt. They almost always tell you they will, but usually they don't.
3) Short Sale - A short sale is at the point where you are trying to avoid foreclosure, because if you don't pursue the short sale a foreclosure will occur. It is not a guarantee, because in a slow market we may not get an offer in time to stop foreclosure, though most of mine I have offers in to the banks within a month, or the bank may even say no to it. The reality is you do a short sale, because you have nothing to lose at that point and it is a better situation for you than a foreclosure.
In order to do the short sale, I need the following from you:
-
-
Last two years tax returns - just the 1040s will do
-
Last two months bank statements
-
Last two month pay stubs or proof of income if self employed
-
A copy of all your latest mortgage statement for all mortgages
-
A detailed hardship letter - I can help with this if you need me to.
All of the other paper work I will fill out and send to you when we are ready to go. it will consist of:
-
-
A Listing agreement
-
A sellers advisory
-
A short sale addendum
-
An MLS profile
-
An Agency disclosure
-
A credit authorization letter
At the point when we get an offer "usually" we are two to three months away from closing, though it may be more. It is really up to how long the bank takes to respond, even though my team and I are VERY aggressive with the banks.
4) Bankruptcy - Usually like foreclosure this is also a last resort, as it really impact your credit for 7 to 10 years. In some cases though, if you have other debt, I have seen people get rid of the second. You would need to hire an attorney to get the answer to whether or not this will work for you, and that is usually a fee of somewhere between $1,500 and $2,000 or more.
Please remember that our business is built almost entirely on referrals. So, please let your friends, family and neighbors know that you have a friend in the real estate business.
It takes a full-time commitment - anything less and you'd be short changed.
Thanks again, your real estate consultant for life,
Nicholas Hoddinott
Broker/Owner
Hoddinott Real Estate Consulting
|
