We’ve all heard of the nightmares that come with the foreclosure process. Losing one’s home is no easy process, financially or mentally. Although it may feel like a major setback, you can make it easier to get through and bounce back from by understanding the process and your options.
Foreclosure is the process in which the bank holding the homes note takes possession due to failure to make mortgage payments. IT’s sounds simple, but it is a lengthy process.
Here are some things to consider:
1. Programs offered by your state for homeowners.
Each state has different programs that are offered to home owners. Check with your local Realtor or home loan lender to see which programs are offered that may apply to your situation. Understanding your State’s foreclosure prevention programs and laws that protect homeowners and consumers can make a difference in keeping your home or walking away on your own terms. Consumers can find information about programs in their state by looking at the National Consumer Law Center website or checking their local state resources.
2. Deed in Lieu of Foreclosure.
A deed in Lieu of foreclosure is an option where the mortgagor conveys all interest in a real property to the mortgagee to satisfy a loan that is in default. A deed in lieu of foreclosure is an option meant to benefit both parties, the consumer and the lender. Essentially, the homeowner agrees to give up the deed to the property and the lender agrees not to pursue a foreclosure and potentially waive any future liability that the homeowner might otherwise incur. This option automatically releases borrower from any financial obligation and the mortgagee takes control of the property much faster to allow for a resale.
3. Short Sale.
There are significant benefits available to homeowners who choose to short sale their home and are informed on the proper way to do it. The Mortgage Forgiveness Debt Relief Act and Debt Cancellation detailed options available to homeowners from 2007 to 2013. Not only is it a much less hit on your credit, you could be eligible for a $3,000 relocation refund. Another great benefit is that a short sale client has the option to buy another home with 2-3 years of the short sale date, while a foreclosure could be as long as 7 years. Call a local Realtor that specializes in short sales and understands the process. Look for Realtors that have the SFR ( Shortsale and Foreclosure Resource Specialist) designation or the DPP ( Distressed Property Professional) designation. These Realtors have gone through special training and specialize in these types of sales.
4. Cash after the foreclosure.
In the case that none of the above options work and your home is foreclosed on, you may be eligible to receive ” cash for keys.” This is a program where the bank will offer you cash to basically move out of the home as long as you leave it in good condition. This is actually another benefit to both the mortgagee and the lender. For the mortgagee, there is no eviction on their record and they get a small amount of cash to assist for relocation. For the lender, they get their house back in good condition so they can turn around and sell it to re-coupe as much money as possible. The lender also saves money that would be spent on attorneys or the eviction process.
There are always options for the homeowner in the United States. tay educated and speak with a local Realtor so you know your options.
If you have any questions, please call Jeff Discher, Realtor, GRI, ABR, CNE, SFR, DPP, e-PRO, SRES at 619-887-2800.