How to Avoid Foreclosure When You're Behind on Your Payments

As the economy has continued to experience setbacks and a lack of stimulation, many people have tragically been forced to foreclose on their homes. Over the last few years, foreclosure statistics have skyrocketed and hit record highs. Reasons for this are many: high interest rates, loss of jobs, interest rates adjusting to a higher percentage, losses in the stock market, and the increasing cost of living expenses. When home-owners are caught in these sand traps, they don't have much choice.

What home-owners facing foreclosure do not realize is that they have legal, ethical, standard options to avoid foreclosure and still not spend money. Here are the best options for home-owners to avoid foreclosure:

1. Try to sell your home.  

• If you're home is still worth more than what you owe the bank, you can sell your home. You will have to price it so that it actually sells, but also try to avoid bringing any many to the table. If you're already behind on your mortgage payments, you will have to sell it for enough to cover those back payments and fees as well. 
• For example, if you still owe $250,000 on the mortgage, but homes comparable to yours in your neighborhood are selling in the $270k's, even if you are a few months behind on your mortgage you  can still cover the existing mortgage after the sale. Talk to a Realtor about your market, marketing, and options.   

      2.  Try to short sell your home.

•  If you're home is NOT worth more then your existing loan balance, the you may consider a short sale. A short sale is when a home-owner sells their home for less ("short") of what is owed on the mortgage, after the bank approves of that price. The bank would rather sell the home $30,000 less than the loan balance to avoid repossessing the home, which costs them major bucks. The problem with short sales is that they are very long processes dealing with the bank, and can take up to a year to close. 

      3. Let a buyer assume your mortgage

•  This is actually the easiest and quickest way to get out of your house and avoid foreclosure on your credit. A buyer (usually an investor) will take over your mortgage payment, pay the back-payments that have not been paid to the lender, and be granted the deed of your home. You will not have to make any more mortgage payments, and will avoid foreclosure on your credit. This is done legally with the lender, county, a title insurance company, and the standard real estate contracts. Many home owners have done this and have benefited.

You DON'T have to be forced to go into foreclosure. You have options.

Email or call me if you have any questions!

New Short Sale Bill Submitted to Congress

U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week.  H.R. 6133, "Prompt Decision for Qualification of Short Sale Act of 2010," is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.  This legislation aims to "require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale."



In this bill, the terms "short sale" means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a residential mortgage loan that:

• will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and
• requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder.

Ms. Golder continued, "Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time. Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives."
Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be foreclosed upon.

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