Avoiding Foreclosure

Gaining a Massachusetts Realtor Loss Mitigation Certification, I have gained experience in complicated transactions involving short sales, foreclosures, pre-foreclosure, bank owned properties and real estate owned properties (REO).  My loss mitigation training has prepared me to assist buyers when purchasing an REO property or short sale property, to educate sellers and help them with negotiating with the bank and organize paper work and packets required for each transaction. Contact me today for a FREE professional consultation (617) 894-1124.

With recent changes in the economy home owners have more options to avoid losing their homes to foreclosure. These options include:

1. Loan Modification: This process will change the terms of a loan. Loan modifications may include lowering the interest rate, freezing an adjustable rate loan, extending the time frame/term of the loan. Many banks including Citigroup, Bank of America, Fannie Mae and Freddie Mac have designed programs to assist homeowners with their current loans to avoid possible foreclosure.

2. Short Sale: Also referred to as a short payoff. This process requires the bank to agree to a sale price that is less than what the home owner currently owns. Short sales have become very popular due to the drop in home sale prices. Bank short sales require approval from the bank. Banks are more likely to approve a short sale if the seller has had a long term hardship that is displayed in a hardship letter. Additionally, sellers must show a good faith effort to sell the home by listing the property with a real estate agent.

3. Deed-in-Lieu of Foreclosure: Opting for a deed-in-lieu hands the property over to the bank and stopping the bank from proceeding with a foreclosure. This option is very rare and many banks will take every step possible to avoid this option. Banks do require proof of a good faith effort by the home owner to sell the property including a current listing agreement and statistics of home being listed on the market for a specified period of time. The benefit for a home owner is the lack of documentation on the home owners record or credit score.

4.  Forbearance: Lenders may forgive borrowers for a short period of time so they can get back on their feet. Forbearance will eliminate the pressure to make payments on the loan until the home owner can begin making payments again. Similar to deed-in-lieu of foreclosure, forbearance is rarely granted.

Additional resources for home owners include contacting HUD, the U.S. Department of Housing and Urban Development; HOPE, HUD's Hope for Homeowners, FHA, Federal Housing Authority and Local community Action programs.

Looking for guidance? Call Madelene today: (617) 894-1124