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Loss Mitigation - Ways To Stop Home Foreclosure
By Susan Willets | June 11, 2008
When avoiding foreclosure, there are several options that can help to bring your default mortgage status to current. Consider the following options when looking for a solution to your unique situation:
Loan Modification/Loan Restructuring
Loan modification or loan restructuring is becoming a growing trend for avoiding foreclosures. This option allows for a permanent change in the loan contract that is agreed to by the lender and the borrower. This change brings your account to date immediately and saves your home and your credit.
Additional Information on Loan Modifications and Loan Restructuring
Short Sales
A short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.
Short Sale Process, Qualifications, Tax Requirements and Effects on Credit
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is a deed instrument in which the borrower conveys all interest in a real property to the lender to satisfy a loan that is in default and avoid foreclosure proceedings. The borrower whose mortgage is in default voluntarily transfers the title to the property to the lender to avoid going through the foreclosure process. This is a situation where both the borrower and the lender can benefit if both parties consent.
Additional Deed-in-Lieu of Foreclosure Information
Special Forbearance
A special forbearance is a written agreement between the lender and the borrower that allows for a temporary reduction or suspension of monthly payments and offers more relief than a regular repayment plan. This option is available for individuals who have documented proof that they are going through short-term financial hardship with payments 3-12 months past due and the lender warrants that this agreement is necessary.
Additional Forbearance Information
Topics: Avoid Home Foreclosure |