Avoid Foreclosure
There are homeowners in our area who may be having trouble making their mortgage payments or who have not made one or more payments. They may be in a situation where they do not know their options. This document was written to provide some straight-forward answers.
The current financial market is confusing and the onslaught of organizations wanting to prey on distressed homeowners for quick profit has grown alarmingly. It is time that homeowners got accurate information. We hope this helps. WE have included links at the bottom to web sites that provide additional information distressed home owners need.
Your options if you are facing FORECLOSURE
1. Do Nothing – If a homeowner does nothing, they most likely will lose their home to foreclosure. Loan applications always ask if you have been foreclosed upon. Credit reports also disclose any foreclosures for a minimum of seven years. This will negatively affect an individual’s ability to obtain financing during those seven years. This is NOT THE BEST OPTION.
2. Payoff/Refinance – Pay off the entire loan balance plus any default amount and all fees charges by the lender. Usually, this is accomplished through a refinance of the debt. The new debt is frequently at a higher interest rate. There can also be hidden snags like prepayment penalties because of your recent default. In order to accomplish this option you must have sufficient income and equity in your home to qualify.
3. Reinstatement – Pay the entire default amount, plus interest, attorney fees, late fees, overdue taxes and various bank fees. These charges add up quickly.
4. Loan Modification – Work with your existing mortgage company to modify the terms of your present loan. This may allow the homeowner to catch up on their loan commitment at a more affordable level. To qualify, you must prove to the lender that you have fixed the problem that caused the default. You must have sufficient income to satisfy the lender. In some cases they will allow you to change the term of the loan from 30 to 40 years, reducing the monthly payment.
5. Forbearance – The lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or a suspension of payments. Documentation will be required by the lender to show that you will be able to meet the new payment plan requirements.
6. Partial Claim – Obtain a loan from another lender for a second loan to pay back payments, interest and fees on the delinquent balance. You must have the income and equity in the home to qualify.
7. Deed in Lieu of Foreclosure – Giving the property back to the bank instead of letting the bank foreclose. Banks usually require that the home be well maintained, all mortgage payments and taxes must be current. Loan applications also ask if you have relinquished a deed in lieu of foreclosure: impacting your ability to obtain financing in the future.
8. Bankruptcy – This can liquidate debt and/or allow you more time. You should consult an attorney if you are considering this option.
Chapter 7 – Liquidation – To completely settle personal debt.
Chapter 13 – Wage earner plan – A payment scheduled is worked out to pay off debts.
Chapter 11 – Business Reorganization – A business debt solution.
9. Sale – If there is sufficient equity, the homeowner can sell and pay off all debts resulting from the delinquency. No lender approval is required.
A Short Sale can be negotiated with your lender by your real estate professional if what is owed is more than the property’s value. 
What Is A Short Sale & Why Should It Be An Option
A Short Sale is when you offer your home for sale at current market value, but less than you owe the bank(s). In doing, so we obtain offers and submit them to your lender(s) for acceptance as a short pay. If the bank accepts, you are no longer expected to make those mortgage payments.
Will it save my credit? Nobody knows exactly how it will affect your credit because the final determination is made when you apply for a credit purchase in the future. We do know that a lender approved short sale will have less of an impact on your credit than will foreclosure. Foreclosures and Bankruptcies are the worst items you can have on a credit report. They will impede or prevent you from borrowing for seven years.* The way your lender reports your short pay, “settled for less than owed” or just “settled” is a key factor. We have clients who completed an approved short sale two years ago. They are now actively looking for another home.
- Fair Credit Report Act allows the legal action of Foreclosure to remain for seven years of the date of filing.
What are some of the benefits? A frequent response from our clients is a sense of pride that they attempted to work out their situation in the best possible way. Less stress from the constant collection calls and more time in their home to create a better plan for moving are some others. Your home remains vacant less than it would as a foreclosure (important for the friends in your neighborhood who would be impacted by your home being vacant). There is also a possibility of a relocation payment. ** ** Relocation payment of $ 1500 proposed as part of the Making Home Affordable Program
What are some of the challenges? They can take a long time. Lenders require extensive documentary proof of your financial position. Lien holders are not required to accept a short pay. They require a lot more work, so most agents are reluctant to take on the responsibility.
We also believe anyone going through a Short Sale or Foreclosure needs to take a Consumer Credit Counseling to learn the steps to re-establish their credit.
Our Solution Heritage Oak Properties provides Short Sale Representation to Sellers in the same manner we represent all of our clients, with sensitivity, respect and honesty. We tell you up front what we need to complete your Short Sale and provide updates weekly, more often when required. Your home will be marketed professionally with maximum Internet exposure (leveraging our knowledge as an e-PRO), color flyer’s, multiple photos and more. The home is not marketed to the public as a Short Sale and there are no Pre-Foreclosure signs or riders. We are required to advise other Realtors of the status, but will only advise serious buyers as part of the required disclosure process. We will also keep you apprised of new legislation that may assist you during and after the completion of the Short Sale.
We have spend considerable time and effort completing a course, learning how better to help sellers deal with their distressed properties. We have earned a CDPE (Certified Distressed Properties Expert) designation. Although the “expert” may be “grandiose,” the knowledge gained is priceless. The designation includes membership in the CDPE community with access to other certified Realtors, providing a vast resource to tap when we incur a difficult or unique situation. Only a small percentage of the Realtor community has made this effort to help distressed home owners.
CONTACT MIKE WEST TODAY
FOR A CONFIDENTIAL CONSULTATION AND INFORMATION
(916) 337-0658
Directory of Web Sites and Help Lines
Foreclosure Avoidance Information Website: www.ForeclosureStopper.ORG
Homeowner Assistance Information Blog Link :Regularly updated information for distressed homeowners
Homeowner’s Assistance Foreclosure Line Phone: 1-888-995-Hope Website: www.995Hope.org
U.S. Department Of Housing & Urban Development Phone: 1-202-708-1112 Website: www.HUD.gov
Fair Housing Administration Phone 1-800-Call-FHA (225-5342) Website: www.FHA.gov
HUD Approved Housing Counseling Agency Phone: 1-800-4287 9AM – 5PM EST Website: www.HUD.gov
Making Home Affordable Program Website: www.makinghomeaffordable.gov
Certified Distressed Property Expert Web Site Website: www.CDPE.com
How do I know if my loan is owned by Freddie Mac? Website: ww3.freddiemac.com/corporate
How do I Know if my loan is owned by Fannie Mae? Website: lookup.fanniemae.com/loanlookup
Heritage Oak Properties is in compliance with the Federal Trade Commission Mortgage Assistance Relief Services (MARS) requirements. (implemented 2/28/11)
- We charge NO upfront fees
- You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will NOT have to pay us for our services.
- Heritage Oak Properties is not associated with the government, and our service is not approved by the government or you lender. (Nor does the government disapprove of our service.)
- Even if you accept this offer and use our services, your lender may not agree to change your loan.
