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Option #1 - Reinstatement-paying back your delinquent mortgage.
The Homeowner can try to work with the bank to get back on track making the mortgage payments in order to keep the home. This is know as reinstatement In some cases the lender will take yhour missed payments and set those up with a promiisory note to be paid back over time with interest, of course. If you choose this option, please understand that upon agreement you will start again to make your same mortgage payments without any changes to the terms.
Option #2 Loan Modification
In this case you are asking the bank to lower your interest rate, extend your mortgage repayment time, ask for a forebearance or forgiveness of a portion of your loan, or a mix of any of the options.
If you are living in the home and want to stay there, this is the best option. We can help you find out if you qualify for a loan modification and we then try to provide several scenarios,
you choose which one you like, and we forward the package to the bank. You will receive your package as well.
Option #3 Short Sale--Sell the Home
The Homeowner can see the home before the bank forecloses on them, if the value is less than what is owed to the bank it is considered a Short Sale.
A short Sale is selling the home before the bank forecloses on it. A Short Sale is a way for the homeowneer to sell the home quickly in order to avoid a complete foreclsoure of the home. With this approach, the lender gets some of their money back, the homeowners avoids foreclosure, and somebody gets a good deal on a home. In most cases, it's the closest thing to a 'win-win' scenario that you're going to find.
Throuogh this process, the lender agrees to let the homeowner sell the home for less than the amount the homeowner owes to the lender. Naturally, this often means that the home will be sold for less than market value as well.
Many ask, "Why would the lender agree to selling the house below market value?" The lenders do it because the foreclosure process can be expensive, adding more costs on top of a nonperforming loan that's already costing them money. So they want to get that home/loan off the books as quickly as possible. The real estate Short Sale is a way to achieve this without having to go through the extensive (and expensive) process of foreclosure, real estate auction, etc.
Option #4 - Foreclose
The homeowner can allow the bank to foreclose on the home.
Foreclosure is the worst option and least desirable of all three. Nobody wants a foreclosure to go on their credit history, because it will make future mortgage/home purchases and other future credit approvals more difficult. A foreclosure will stay on your credit report for 10 years. The lender can also go after the homeowner for a Deficiency Judgement. (A Deficiency Judgement is a judgement lien against a debtor, defendant or borrower whose foreclosure sale did not produce sufficient funds to pay the mortgage in full. The the bank's lawyer must make a motion to receive such a deficiency judgement. Otherwise, the amount gained from the sale shall be deemed the full amount owed, and the bank has no right to collect the additional debt. However, if the parties (mortgagor and mortgagee) have already agreed in their mortgage or promisory note, then the debtor could be liable for the full amount. A debtor who has a deficiency judgement should see an attorney for possible remedies, incuding bankruptcy, an exemption from creditors, an appeal, or a motion. |
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