There are numerous Mortgage Relief Options Available…
In many cases, several of these options may be used to achieve a satisfactory Loan Modification
A Forbearance Plan
In a Forbearance plan, you are allowed to delay or reduce your payments for a period of time. This will give you time to get over your financial hardship. A Forbearance Plan is usually done with the understanding that another option will be used at the close of that time to bring your account to a current status. Your lender (if in agreement) will then temporarily cease legal actions.
You must show what the problem is... and, what the resolution will be…
Deferral of Past Due Payments
If due to a hardship, you have fallen behind on your payments… Now you are back in a position where you can afford your regular monthly mortgage payment,(or even a reduced monthly payment) but you can’t catch up with the past-due balances…You will need to get any past-due amounts including interest, penalties and escrows deferred or added back to the unpaid principal balance. The new amount will be re-amortized over a new time period, and your mortgage account will be brought current immediately.
Loan Modification
A Loan Modification changes the Terms of your existing mortgage. This allows you a fresh, clean start in managing your mortgage and your mortgage account will be brought current immediately.Therefore modifying the loan amount to a new affordable and comfortable monthly payment. Examples:1. Reduced Interestrates to lower your monthly payment. 2. Modify from an Adjustable Rate Mortgage to a Fixed Rate Loan. 3. Extend the Term of the Loan to 40 years to help lower your mortgage payment.
Reinstatement
The Reinstatement amount is the total that is past due including late fees and Attorney costs. This amount is what is required to bring your Mortgage current. Because of your financial circumstances in the past, you may be facing past-due fees, including back payments, late fees and legal expenses. If you are able to pay the total in full to bring your payments to current status by a specific date, you may be eligible for a Reinstatement plan. A Reinstatement will offer you the quickest method for resolving your mortgage foreclosure. With your foreclosure resolved you can enjoy the security of your home.
Repayment Plan
The most common way of resolving a loan default is to work out a plan which will let you repay part of the delinquency each month, along with you regular monthly installment. Most of our clients will be eligible for a Repayment Plan for the amount they are delinquent if their financial circumstances have stabilized. Most of our clients have realized a short term financial hardship that has caused them to become delinquent. They are now financially back on their feet and need help getting caught up. We will negotiate with your lender to re-distribute your past-due amount over a set period of time, usually 18-24 months, depending on your circumstances.
Deed in Lieu of Foreclosure
A Deed in lieu of foreclosure: Allows you to transfer the ownership (Deed) of the property to the lender and avoid foreclosure proceedings. If you're sure that you can't afford to keep your house, you may be able to reach an agreement with the mortgage holder whereby you simply give the house back and stop foreclosure. The mortgage holder would agree to accept the deed as full settlement and cancel the remainder of your debt. The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts their credit less than a foreclosure does.
Whether or not this is a good option to stop foreclosure for you depends upon your equity in the house, the amount of outstanding debt, and what other options are available to you. Of course, the mortgage holder won't always be willing to enter into such an agreement, but if there is little chance that you'll be able to pay a deficiency judgment, the lender may decide that it's better to avoid the costs of a foreclosure proceeding, stop foreclosure and accept the deed as full settlement.
Sell the Property to Stop Foreclosure
If you have significant equity in your house, selling it is a good option because it may allow you to stop foreclosure and walk away with money in your pocket. Where equity is limited (or non-existent), it can be difficult to sell the property because of the need to cover the mortgage and the other associated costs of a sale. In some cases, the mortgage holder may agree to a short sale.
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Short Sale:
This means the lender will agree to accept less than the full amount of the mortgage. This allows you to stop foreclosure and avoid a deficiency judgment, while the lender recovers the bulk of the amount due without having to pursue foreclosure proceedings.
Stop the Foreclosure or Surrender the Property in Chapter 7 Bankruptcy
Unlike Chapter 13 bankruptcy, Chapter 7 bankruptcy does not provide a means to save your house from foreclosure. The automatic stay entered in most bankruptcy cases will stop foreclosure proceedings, but the Chapter 7 process does not provide a mechanism by which you can catch up on your past-due payments and keep your home. However, if you've been unable to work out an alternative and you know that you cannot afford to keep your house, Chapter 7 bankruptcy has some advantages. First, the automatic stay will temporarily stop foreclosure proceedings, giving you time to make necessary arrangements. Second, a Chapter 7 bankruptcy will eliminate most of your unsecured debt (credit card debt, outstanding medical bills, etc.), so that you may be more able to meet your regular living expenses. Finally-and perhaps most importantly-Chapter 7 bankruptcy can eliminate any deficiency judgment, so that you don't end up losing your house and still making payments to the lender. Please consult an Attorney if you feel this is an option for you.
