Foreclosure Prevention Tips
First of all contact your mortgage company to see if it’s willing to assist you. The mortgage company is the bank to which you make payments monthly. Ask to speak to the LOSS MITIGATION department or any department it has for this. Some banks offer a repayment agreement which allows you to catch up with your mortgage payments over a certain period of time. If your payments are no longer affordable, try to negotiate to RESTRUCTURE the terms of your loan to make your payments temporarily or permanently affordable.
When speaking with anyone from the mortgage company, remember to write down their full name, telephone number and job title. Make a copy of every document you send to the mortgage company and send it via certified mail with return receipt requested. If you reach a verbal Agreement over the telephone with the mortgage company, put the Agreement in writing then send it via certified mail with return receipt requested. The post office workers will show you how to send it by certified mail with a return receipt requested.
While you try to negotiate this with the bank, be aware that you may not be offered an agreement and that you must look at other means to try save your home. Consider looking for legal assistance from private lawyers, self-help legal clinics, or organizations that offer services to eligible clients such as Legal Services of Greater Miami, Inc., among others.
The following are some options which might be suitable for your situation:
SALE OF THE HOME
• Try to SELL your home quickly, if you find a buyer but cannot close on it before the foreclosure sale, you can file a “Motion to Cancel a Foreclosure Sale”. This will allow you time to complete the sale of your home. You should hire a lawyer to review all documents, prepare the Motion, and represent you at the real estate closing. Also you have to understand that the present real estate market is working against obtaining qualified and available buyers, thus making a normal sale extremely difficult.
SHORT SALE
A short sale is when the lender (bank) allows a property to be sold for less than amount owed on the mortgage. An example of a short sale is this:
You owe $100,000 and find a buyer who will give you $90,000. This means that the bank will be receiving an amount less than what you owe.
• You should contact only reputable companies for this, which may be able to help you. This only works if the mortgage company agrees to the short sale and the bank agrees to accept the short sale. Make sure that you understand
everything before signing anything.
DEED in LIEU of FORECLOSURE
Deed in lieu of foreclosure means you are giving the house back to the mortgage company. You should consider this if there’s no equity in the home. Example of equity is this: You owe $150,000 but the house is worth $170,000 at present market value. The $20,000 difference is the equity in the house.
First you should obtain a written confirmation from the mortgage company stating that you will not owe the mortgage company any money. It is very important to get this confirmation in writing from the mortgage company before you agree to execution of a deed in lieu of foreclosure.
If you are already too advanced in the foreclosure process, you are aware there is no possibility of a normal sale anymore, and you don’t have a considerable amount of equity, then DEED in lieu of foreclosure is best advice.
More of this (and other options will be discussed further).
REFINANCE
Refinancing is an option to save the home. This option only makes sense if there’s considerable equity in the home and/ or if you will be obtaining a much lower interest rate. STAY AWAY from refinancing which offers a HIGHER RATE. You will be “re-buying” the home and owing much more on it. Simply put, you will be eating away at the equity and only “buying time” in the hope that your current job and financial situation improves. Chances are you will be in default again soon after that.
REVERSED MORTGAGE
If you are 62 years of age or older, you may want to consider obtaining a reverse mortgage. If you qualify, this type of mortgage allows you to live in the home without making payments, as long as it is your primary residence. You will only be responsible for property tax and insurance payments. Amount of reverse mortgage you qualify for is based upon your age and the value of your home. AARP has more information about reverse mortgages on their website: http://aarp.org/money/revmort
BANKRUPTCY
A Chapter 13 Bankruptcy can be filed up until the date of the foreclosure sale to stop the foreclosure. With a Chapter 13 Bankruptcy you must be able to have enough MONTHLY INCOME to cover all your expenses and have enough money left over each month so you can bring your mortgage current within 60 MONTHS. Other options might be available concerning bankruptcy situations.
To find out more about getting a fresh start thru bankruptcy contact a bankruptcy lawyer or self-help legal clinic for further details. Usually the first time a bankruptcy attorney sees you it will be free of charge. Ask before visiting.