What Are My Options

Options for Homeowners Facing Foreclosure

Reinstatement
If the reason a homeowner missed payments was temporary and it has been resolved, they have the option of Reinstatement right up to the bank sale. Reinstatement is simply paying back all missed payments, late fees and legal fees that are due up to the date that the loan is reinstated. The homeowner requests this amount from his mortgage company in the form of a reinstatement letter.


Forbearance or repayment plan
If the issue that caused the homeowner to miss payments is temporary but the homeowner cannot come current on their mortgage through reinstatement, the lender may allow homeowner to pay the missed amount over a period of time or the lender may place the missed payments on the end of the scheduled loan amortization.


Sell the Property
If the buyers have equity in their property, they can sell it and use the funds from their equity to cure the foreclosure.


Rent the property
In some cases a homeowner facing foreclosure may have payments low enough to allow him/her to rent the property and keep up the mortgage payments. This however, is a short term solution since when taxes and insurance payments come due, many homeowners cannot afford them.


Refinance
If the homeowner has sufficient equity and income and their credit has not been too badly damaged, they may be able to refinance. This is also typically a short term solution since the payments on the property typically go up considerably due to the refinance. If the homeowners situation that got them to miss their payments has been resolved then sometimes this will work, but in many cases this is a foreclosure waiting to happen.


Loan Modification
If the homeowner does have the means to pay their mortgage payments, their mortgage company may qualify them for a loan modification. A loan modification is where the lender lowers the interest rate in an existing loan in order to lower the payments.


Short-Refi
This process involves the refinance of a home with a reduction in their principal balance and often the interest rate as well. The homeowner will have to show a hardship and the ability to pay the new mortgage.


Deed-in-Lieu of foreclosure
A deed in lieu is simply when the homeowner essentially gives the deed back to the bank. This may prevent the banks from going through a very lengthy and expensive foreclosure process and in exchange they will sometimes forego their rights to deficiency judgment. (Works when there is one mortgage and no liens) This does not happen very often.


Bankruptcy
A bankruptcy may stop a foreclosure and allow a homeowner to reorganize his dept and keep his property. The reality however is that most of the time this is not the case and the bankruptcy only stalls the foreclosure. If the homeowner is not able to make the payments after bankruptcy the house will foreclose anyway.


Service members civil relief act (SCRA)
The SCRA is a bill that was signed into law (public law 108-109) on December 19, 2003. This law provides certain protection to military personnel that are in foreclosure in specific situations. It provides temporary relief from paying your mortgage. To obtain relief, a military member must show their mortgage was entered into prior to beginning active duty, and their property was owned prior to entry into military service, that the property is still owned by service member, and that military service materially affects he members ability to pay mortgage.


Short Sale
When a homeowner owes more on the property than it is currently worth and one of the above solutions do not apply to their situation, there is the option of pursuing a short sale.

Call 858-764-7300 today to schedule an appointment.

We LISTEN, then we List.