Foreclosure Solutions
If you are currently in foreclosure and would like to discuss your options please give us a call at 423-444-4282 or 423-444-3708.
We buy Houses!! And can pay cash!
A short sale is also an excellent solution
for
homeowners who need to sell, and who owe more on their homes than
they are worth. As long as you are working with a professional who
understands the process to get your short sale approved. We have been
doing short sales since 2002 before most realtors knew what a short
sale was. We have completed over 100 of these transactions. Call a
professional and Get professional results!! Below we will explain several options you may have as a homeowner is distress.
The current U.S. 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
available to Tennessee residents for foreclosure are many. Following
is a SUMMARY of these options, including their benefits and
drawbacks:
1. Sell the Property
Homeowners with sufficient equity can list their property with a
qualified agent that understands the foreclosure process in their area.
- 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).
Sell the home to us! We pay cash and can close quickly.
2. Short Sale: (see more details below after the 10 options What is a Short Sale?)
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 the home purchase and the date of the
short sale negotiation. Acceptable hardships include but are not limited
to: mortgage payment increase, job loss, divorce, excessive debt,
forced or unplanned relocation, and more.
- 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).
- 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 who
understands the process to get your short sale approved. We have been
doing short sales since 2002 before most realtors knew what a short
sale was. We have completed over 100 of these transactions. Call a
professional and Get professional results!!
3. Reinstatement
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 lender’s approval and will ‘reinstate’ a mortgage
up to the day before the final foreclosure sale.
- Benefit: Does not require the mortgage company or lender’s approval.
- Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.
4. 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.
- Benefit: Allows the homeowner to make back payments over time.
- Drawback:
Requires that a homeowner be in a financial position to pay not only
their current mortgage, but also a portion of the back payments
owed. Some mortgage companies will require a homeowner to ‘qualify’
for a forbearance.
5. Mortgage Modification
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 any combination of these. These typically result in
a lower payment to the homeowner and a more affordable mortgage.
- Benefit:
Reduces the payment a homeowner is required to make on a monthly basis
and may reduce the principal balance of the loan
- Drawback:
Requires that a homeowner ‘qualify’ for the new payment and will often
require full documentation. Lender has to be actively pursuing
modifications.
6. Rent the Property
A homeowner who has a mortgage payment low enough that market rent will
allow it to be paid, is able to convert their property to a rental and
use the rental income to pay the mortgage.
- Benefit: Allows homeowner to keep property indefinitely.
- Drawback: The
issues that can arise with a rental property are many, and rent often
does not cover the full cost of property ownership and maintenance.
7. Deed in Lieu of Foreclosure
Also known as a ‘friendly foreclosure’, a deed in lieu allows the
homeowner to return the property to the lender rather than go through
the foreclosure process. Lender approval is required for this option,
and the homeowner must also vacate the property.
- Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
- Drawback:
Requires that a homeowner vacate the property, and a deed in lieu may be
reported to credit bureaus as a foreclosure.
8. Bankruptcy
Many have considered and marketed bankruptcy as a ‘foreclosure
solution,’ but this is only true in some states and situations. If the
homeowner has non-mortgage debts that cause a shortfall of paying their
mortgage payments and a personal bankruptcy will eliminate these debts,
this may be a viable solution.
- Benefit: Does not require lender approval.
- Drawback: If a
homeowner cannot afford their mortgage payment, a bankruptcy will
only stall—not stop—the foreclosure process. Bankruptcy can be costly,
is damaging to credit scores, and can only be declared once every
seven years.
9. Refinance
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.
- Benefit: In some cases, this will lower payments.
- Drawback: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process.
10. 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.
- Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
- Drawback: Must be active military to qualify.
This represents only a summary of some of the solutions available to
homeowners facing foreclosure. Please call me today for a free
confidential evaluation of your individual situation, property value,
and possible options
UA-17861956-2
|