Many homeowners are now faced with the fact that their mortgage has become unaffordable.  Whether it's because of the adjustment of an option arm, unemployment or some other circumstance that has affected cash flow, there are now alternatives to an inevitable foreclosure with eventual eviction.

If the homeowner's goal is to keep the home, the first option to explore is a loan modification. A loan modification is an agreement between the homeowner and their lender to modify the terms of the existing loan agreement.  A homeowner must qualify for the loan modification and not all homeowners will be approved.

In addition to helping a homeowner avoid foreclosure it can help the homeowner save their credit history.  While any late payments are reported to the credit bureau the homeowner will not have a foreclosure reported if the property was not foreclosed.  The transaction may be reported as "settled for less" and the damage to a credit score is less than if a foreclosure was reported.  In addition, the homeowner may be eligible to purchase a property again in as little as two years if credit has been re-established. Lastly, a foreclosure on a credit report may affect the ability to obtain employment or security clearance.

Short sales actually allow the homeowner to be in a bit of control as well.  When a homeowner can no longer afford to make their mortgage payments a foreclosure is inevitable if action is not taken.   If a loan modification is not a choice, the short sale will help in speeding up the unfortunate financial turmoil.  Since the process is quicker than a foreclosure, it will help the homeowner get on with their lives.

A deed in lieu of foreclosure is an instrument which conveys title to the property back to the lender and the homeowner can walk away.  The lender will typically require the home be listed for sale for a minimum of 90 days prior to offering a deed in lieu.

Any of these options may stall the foreclosure process, but it is necessary to act quickly. Call us now at 800-546-2289