Having trouble with your mortgage payments? You are not alone.
What to do now?
Many Americans are having trouble making their mortgage payments. If you are part of this group, you need answers, solutions and information about your options.
Well what I’m about to tell you may not be the exact information you are hoping for but it’s honest. I am going to give you insights and info and some links to other experts. Please know that I’m not a lawyer or your mortgage holder so continue to do your research before you decide on an action plan.
If you cannot make your mortgage payments (at the current payment amount), your options may look like this:
Loan Modification
Repayment Plan
Short Sale
Deed in Lieu of Foreclosure
Risking Foreclosure while you try to get current on your payments
Let ’s look at these options…
Loan Modification: with a loan modification, the lender agrees to reduce your interest rate or payment amount. This is a good thing but not necessarily easy to achieve. It’s most available for folks who have a documented hardship (i.e. loss of a job, illness, death or disability of one borrower) but others have been successful without this type of hardship.
Repayment Plan: with a repayment plan, the lender compiles your late payments, late fees and any other money owed (such as unpaid property taxes) into a lump sum then spreads this amount over a number of payments. The purpose is to allow you to get current. This option is easier to get agreement on than a loan modification. The downside is that your payment amount will probably be more than your previous monthly payment because it includes past due amounts.
Short Sale: Many property owners have a mortgage balance that exceeds the value of their property. If you are in this situation, you can attempt to negotiate what’s commonly referred to as a Short Sale. This means that at closing, the payoff to the bank or lending institution will be short of the total amount owed on your mortgage(s). You should understand -in advance- all short sales must be approved by the lending institution. If it’s not approved, the escrow is not going to close. Lending institutions differ in their requirements for positive decision to proceed with a short sale. Many require that the seller prove hardship (i.e. loss of a job, illness, death or disability of one borrower).
Short sales tend to fall into two categories. Some agents will suggest that you list your property at a price that should encourage offers and then hope that they can convince the bank to accept an offer once one has been presented. This is challenged plan. It’s best to coordinate the short sale plan with the bank in advance if at all possible. When homeowners obtain agreement from their lender prior to listing , it’s a more reliable position.
Deed in Lieu of Foreclosure: In this scenario, you sign a deed back to the lender. Please consult with an attorney about Deficiency Judgments and tax ramifications. This may not seem like a terrific option yet the lender can agree to waive deficiencies and that may be a big win if you’ve refinanced.
Foreclosure: Before you decide to just let the lender foreclose, please consider the options outlined above. Foreclosure has ramifications including Deficiency Judgments and tax ramifications that should be explored. A short sale or deed in lieu may provide you with a better position for the long term.
I understand that you may be in a difficult situation. Difficult situations call for tough choices. The best action you can take is research your options thoroughly, then take the most favorable option available to you. Whatever the short-term outcome, look to the future and rebuild your assets – new opportunities will be there when you are ready for them!
Resources
U.S. Department of Housing and Urban Development
Help for Homeowners Facing
the Loss of Their Home
http://www.hud.gov/offices/hsg/sfh/econ/econ.cfm
Federal Housing Administration website about Loan Modification
http://portal.hud.gov/portal/page?_pageid=73,1826690&_dad=portal&_schema=PORTAL
Article from the Wall Street Journal titled “What People Can Do IF Foreclosure Looms”
http://www.realestatejournal.com/buysell/mortgages/20070907-efrati.html
HLCC Sacramento- a Non Profit Housing Education and Counseling Organization
http://www.hlcc.net/foreclosure.html
Hope Now - an alliance between HUD approved counseling agents, mortgage companies, investors and other mortgage market participants
http://www.hopenow.com
A HUD recommended non profit offering Default and Foreclosure counseling
http://www.bydesignsolutions.org/
Aprenda Como Evitar la Ejecución Hipotecaria. Aquí Puede Conseguir
Ayuda: http://www.nahrep.org/PreventForeclosure/Index.aspx
Adversity has the effect of eliciting talents, which in prosperous circumstances would have lain dormant. Horace (65 BC - 8 BC)
You gain strength, courage and confidence by every experience in which you really stop to look fear in the face. You are able to say to yourself, 'I have lived through this horror. I can take the next thing that comes along.' You must do the thing you think you cannot do. Eleanor Roosevelt
In prosperity prepare for a change; in adversity hope for one.
James Burgh
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