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Short Sale and Foreclosure Details
The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families.
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.
Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.
Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.
Deed in Lieu of Foreclosure
Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.
Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.
Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.
Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.
A Certified Distressed Property Expert (CDPE), Lori Brown pointed out that the long-term implications of foreclosure cannot be underestimated. Committed to helping homeowners to understand their alternatives to foreclosure and to take action that will change their current financial course Lori Brown has developed a report entitled, “Change the Course! And Navigate Away from an Unmanageable Mortgage,” that can be viewed on her website.
www.loribrownsales.com , click on Client Information
Lori can help you short sale your property and get back on your feet. Send an email at Lori@LoriBrownSales.com. Lori will contact you for a free consultation.
When you talk, she will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call Lori,
Lori Brown at 810-543-8896
View homes for sale at www.LoriBrownSales.com
Thanks for reading, Lori Brown.
Lori Brown is a CDPE-Realtor at RE/MAX Advisors.
Office 586-725-1900 Email Lori@LoriBrownSales.com
Lori Brown specializes in assisting homeowners facing financial difficulties in Macomb and St. Clair Counties, including all areas of Southeastern Michigan. By exploring options to avoid foreclosure through dignified solutions including the short sales process, clients receive sound real estate advice.
IMPORTANT GOVERNMENT DISCLOSURE: 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. The above brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan