If you are currently 2 month late on your mortgage the foreclosure process has already started. Chances are your bank will soon file a Lis Pendens. A Lis Pendens in the first step in the foreclosure process where the bank officially files your default with the county clerk.
If you are falling behind on your mortgage you should speak to your bank and/or seek the help of a Realtor immediately.
The current US housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options for foreclosure are many; following is a brief explanation of these solutions.
A reinstatement is the simplest solution for a foreclosure however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lenderâ€™s approval and will â€˜reinstateâ€™ a mortgage up to the day before the final foreclosure sale.
FORBEARANCE OR REPAYMENT PLAN
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan the term of the loan or all or any of the above. This typically results in a lower payment to the homeowner and a more affordable mortgage.
RENT THE PROPERTY
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid can convert their property to a rental and use the rental income to pay the mortgage.
DEED IN LIEU OF FORECLOSURE
Also known as a â€˜friendly foreclosureâ€™ a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Deed in Lieu requires lender approval and requires the homeowner to vacate the property.
Bankruptcy has been marketed by many as a â€˜foreclosure solutionâ€™ which in some states and situations it can be. If the homeowner has non-mortgage debts whose payments are causing them to fall short of paying their mortgage payments and a personal bankruptcy will eliminate these debts this may be a viable solution.
If a homeowner has sufficient equity in their property and their credit is still in good standing they may be able to refinance their mortgage.
SERVICE MEMBERS CIVIL RELIEF ACT (MILITARY PERSONNEL ONLY)
If a member of the military is experiencing financial distress due to deployment and that person can show that their debt was entered into prior to deployment they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with Servicemembers in relation to qualifying for this relief.
SELL THE PROPERTY
If a homeowner has sufficient equity in their property they can list the property with a qualified agent that understands the foreclosure process in their area and sell their property.
If a homeowner owes more on their property than it is currently worth then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: payment increase, job loss, divorce, excessive debt, forced or unplanned relocation and more.
As a Certified Distressed Property Expert (CDPE) I have the knowledge to assist homeowners facing the possibility of foreclosure. Please do not hesitate to contact me if I can be of any assistance.
Sales Associate, CDPE
RE/MAX Gold Coast Realty
56 Newark Street
Hoboken, NJ 07030
Direct: 201 795-5200 x340