Wednesday, June 18, 2008

Save Your Home from Foreclosure

Are you a month or two past due on your mortgage payments? Are you financially and emotionally stressed? If so you're not alone. With the sub-prime mortgage crisis, rising interest rates and a tough economy, thousands of Americans are in the same situation.

Perhaps you've already received a warning letter from the bank. It’s time to get pro-active to save your home from foreclosure before it's too late.

1) Forbearance
Immediately get in touch with your banker and let them know you're struggling to make your payments. If you've been a good customer, they may be willing to work with you. For example, they may work out a deal where you make payments at a reduced rate, or be willing to suspend payments for a few more months until you're back on your feet. This approach works best if you've been temporarily disabled due to injury or illness.

2) Mortgage modification
Another possibility is that your lender may be willing to modify your existing mortgage. This is where you get the lender to agree to an interest rate reduction, or to a longer payback period. It's a lot like refinancing, only you don't have to get another lender involved or go through qualifying for a loan all over again.

3) Died in lieu of foreclosure
When you're in a tough situation, this may be the best option because in the end everyone wins. By doing a died in lieu, which is where the homeowner simply hands the home deed over to the lender and walks away, the homeowner is able to save his/her credit, and the lender avoids a costly foreclosure process.

4) Short Sale
If none of the above works, you may be able to sell your home for whatever the market brings, regardless of your mortgage amount, and get the lender to agree to take the proceeds and let you walk away. For example, say your mortgage level is $200,000 but you know in this market you can only sell for $175,000. It’s quite possible today that your lender will take the $175,000 and release you from the mortgage. You can then find a less expensive living arrangement until you are on more solid financial ground again. As an experienced Realtor I can assist you through the short sale process.

Whether your goal is to stay in your home or to get out of it without going through foreclosure, you need to be pro-active. Please do not be hesitant to call me if you wish some guidance at this time. My toll-free number is 800-923-3245.

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