My home is in frcl & sale date is in 30 days,was my personal home, but now is rented month to month for less than the pymt. is it to late 2 list?

Asked by Mike Shelton, Charlotte, NC Tue Aug 23, 2011

4sale when my wife & I separated 3 yrs ago,we couldn't make the pymt so rented if for much less than the pymt. due to my recent health problems & our separation, we fell behind. the tenants led us to believe they they were going to buy it until about 2 months ago when they said they couldn't. We are now several months behind on our pymt & the sale date is about 30 days away. the rent we receive monthly is about $1200 less than the $3000/mo pymt, we just got a modification rejection from GMAC because we don't live in it. Now we are faced with the sale date in a few weeks and don't know any other options. I could move back into the property if the mtg company would assure me they would lower the pymt permanently to around $1500 to $1800 per month, but I hate to give up where I rent without any guarantees but I don't think the mtg company will help unless I'm living in it. I don't know what to do?? any suggestions?? I would be willing to sell it too but I'm afraid time has run out 4 that

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Daniel Fisher, Agent, Charlotte, NC
Tue Aug 23, 2011
I cannot imagine what it feels like to face the possibility of losing a home. Training, continuing education paired with experience provides a sure process for evaluating and guiding homeowners through their options. While the options are not ideal, the goal is to discover workable solutions and get back on path to financial stability. My clients have found strength in the active role that they can play in avoiding foreclosure. Because a foreclosure can wreak havoc on credit and affect current and future employment status and other long-lasting effects, avoiding foreclosure should be a primary goal.

I can help the homeowner navigate through a variety of options. Below I’ve listed some of the most common alternatives to foreclosures that homeowners can choose from:

1) Reinstatement
•• Benefit: Does not require mortgage company or lender approval.
•• Drawback: Requires a homeowner pay all missed mortgage payments, fees and penalties.

2) Forbearance or Repayment Plan
•• Benefit: Allows the homeowner repay all missed mortgage payments, fees and penalties over time.
•• Drawback: Requires finances to pay current mortgage payment plus agreed portion of back payments owed.

3) Mortgage Modification
•• Benefit: Reduces monthly mortgage payment based on current income. May also reduce principal loan balance.
•• Drawback: often require full documentation loan underwriting to qualify borrower for new loan. Government sponsorship of program is only available for a limited time.

4) Sell the Property
•• Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
•• Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

5) Rent the Property
•• Benefit: Allows homeowner to keep property indefinitely.
•• Drawback: Rent may not cover the full cost of property ownership and maintenance. Collections, evictions, restoration and re-renting the property can have high costs. Loss of capital gains exemption if property not used as primary residence at least 2 of the last 5 years.

6) Deed in Lieu of Foreclosure
•• Benefit: A successful deed in lieu transaction, borrower signs over title to the lender, which agrees to not pursue a deficiency judgment against the borrower. Some lenders give cash for keys to vacate the property.
•• Drawback: Requires that a homeowner vacate the property, and a deed in lieu is often reported to credit bureaus the same as a foreclosure.

7) Bankruptcy
•• Benefit: There are ways an attorney can preserve a primary residence through a bankruptcy.
•• Drawback: If a homeowner cannot afford their bankruptcy proscribed mortgage payment, they can still lose their home to foreclosure. Bankruptcy will prevent the purchase of another home for 3+ years, possibly shorter if no payments were missed prior to the change in title

8) Refinance
•• Benefit: In some cases, this will lower payments.
•• Drawback: In today’s market, refinancing will almost always raise mortgage payments and is an expensive process.

9) Service members Civil Relief Act (military personnel only)
•• Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
•• Drawback: Must be active military to qualify.

10) Short Sale
•• Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual’s public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure). Bankruptcy will prevent the purchase of another home for 3+ years, possibly shorter if no payments were missed prior to the change in title
•• Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.

It has never been more important to pick the right agent!
With the right assistance, the stress of facing foreclosure becomes manageable. I have received the knowledge and training necessary to assess all possible foreclosure alternatives and pursue homeowners’ best options. I continually attend on-going training seminars and receive immediate notification of any changes in legislation or procedure that affect the housing market in general and distressed properties in particular.

What this means to you is that when you work with me you are working with an agent with the most informed and up-to-date resources available! Short sale seems like the best option. And it is not too late. We'll need to engage an attorney, and can have your home on the market with professional photographs within 4 or 5 days after listing agreement.
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Richard Price, Agent, Monroe, NC
Tue Aug 23, 2011
Ditto what Shanna and Cynthia said, thought I might add to make sure the broker you call has good short sale experience and a good attorney who regularly handles short sale negotiations.
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Cynthia Math…, Agent, Charlotte, NC
Tue Aug 23, 2011

It is not too late but you need to move quickly! Your home would need to be listed as a "Short Sale" I would have several questions for you to include, how many mortgages do you have and what bank are they with? This information can have significant impact I have successfully helped both buyers and sellers successfully close short sale transactions in the last two years. When chosing an agent to list your home as short sale, it is important to hire an agent who has had experience and success specifically with short sales. I live in Waxhaw and specialize in Union County. I would like to meet with you to discuss how I can help you avoid foreclosure and educate you on your options. Please call me at your earliest convenience. Cynthia Matheny, Keller Williams 704.787.1039
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Shanna Rogers, Agent, Murrieta, CA
Tue Aug 23, 2011
Hi Mike,

Contact a local Realtor about doing a Short Sale. Most lenders will postpone the Trustee Sale/Auction if you get a realistic offer submitted to them for their approval. Since your sale date if fast approaching, you should contact a Realtor as soon as possible (today).

Good luck.

Shanna Rogers
SR Realty
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