If you are behind on your mortgage payments here are some suggestions for avoiding foreclosure. In order to stop the Foreclosure process, you need to do everything you can to avoid having the Notice of Default sent to you. If you know you are unlikely to meet your mortgage obligation, the first thing you should do is call your lender. Ignoring the problem or letters from the bank only makes the situation worse! If you have already been served with the Notice of Default you still have options, BUT that means TIME IS SHORT, so contact the Veenstra Team immediately so that we can help you understand and explore your options. We will provide some information here to give you a basic understanding of your options. The best advice we can give you, however, is to CALL the Veenstra Team now so that you have the best options.
Depending on your particular situation and hardship circumstances, here are some options your lender might propose to you:
Additional time to get caught up on your payments. Lenders might agree to wait before taking legal action against you and let you work out a repayment plan that is affordable for you. This is called forbearance.
- Debt Foregiveness
Forgiving a payment. If you can agree on a way that you will be current after missing a payment or two (without the means to pay it back), the lender might give you a break and waive your obligation. This is called debt forgiveness, and it is very uncommon.
- Repayment Plan
Spread out the missed payments over a longer term. For example, if your payment is, say, $1,200 a month, the lender might let you add $100 a month to each payment for a year until you are caught up. This is called a repayment plan.
- Note Modification
Changing the terms of your loan. If your mortgage is an adjustable loan, the lender might freeze the interest rate before it increases or change the interest rate to a more manageable rate for you. A lender might also extend the number of years over which the mortgage is amortized. This is called a note modification.
Add the back payments to your loan balance. If you have enough equity and can meet the lender’s lending guidelines, the lender might be willing to increase your loan balance to include the back payments. In this case the lender will also re-amortize the loan. This is called a refinance.
- Partial Claim
Make a separate loan to you. Certain government loans contain provisions that let borrowers who meet specific criteria apply for another loan, which will pay back the missed payments. This is called a partial claim.
Ways to Stop Foreclosure
If you are not able to take advantage of any of the options listed above, and the lender files a Notice of Default against you, your options are limited. That is why it is better for you to call your lender before falling behind on your payments, because lenders are often reluctant to work out repayment schedules after foreclosure proceedings have started.
You will be given a certain time period to bring the payments current, pay the costs of filing the foreclosure and stop the foreclosure. This is called reinstatement of your loan. If you cannot make up the missed payments and the lender will not work with you, here are a few other options to stop foreclosure:
- Sell Your Home
The Veenstra Team can provide you with an opinion of the current market value of your home within a short time frame (which is typically necessary to avoid foreclosure.) The Veenstra Team has an very strong marketing strategy for our homes, so we provide a better than average success rate to get your home sold in a shortened time frame.
- Sell Your Home as a Short Sale
A challenge that complicates the process of getting your home sold in a limited amount of time is that many of the homeowners in distress owe MORE than the current market value of the home. If your home is worth less than the amount you owe, you might be a candidate for a short sale. A short sale does affect your credit score but it is typically not as bad as a foreclosure. The Veenstra Team has been successful in helping to get several short sale transactions completed. The Veenstra Team partners with a short sale company that specializes and focuses solely on short sales. They understand all the intricate details in negotiating with the bank and gaining cooperation with the lender. The short sale seller typically does not have to pay any commission to the Veenstra Team, so for many distressed homeowners, a short sale (sometimes called a pre-foreclosure redeemed) is the best option for alleviating the challenging circumstances caused by loss of a job or other hardship. Some of the hardships that cause a homeowner to qualify for a short sale include being laid-off or fired from a job, the inability to continue working due to medical conditions, divorce, or sometimes job transfer to another state.
- Assign the Deed Back to the Lender (Sign a Deed-in-Lieu of Foreclosure)
At times a foreclosure can be avoided by deeding the home back to the lender. The homeowner gives the lender a properly prepared and notarized deed, and the lender forgives the mortgage, effectively canceling the foreclosure action. This process typically affects the homeowner’s credit in the same manner as a foreclosure.
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IMPORTANT NOTICE : Evenboer Walton REALTORS 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. “If you stop paying your mortgage, you could lose your home and damage your credit rating”