Tuesday, January 12, 2010

FORECLOSURE: Some Options Exist

Many throughout our communities are facing or have experienced foreclosure. The economy and other factors have affected property owners and has been no respecter of persons. Nearly 20% of home sales in 2008 were bank owned, REO, or foreclosed properties. Foreclosure filings in February 2009 totaled over 290,000 across the nation, up 30% from the previous year. Even more alarming is that one in 8 homeowners with a mortgage in America are either behind on their mortgage or are in foreclosure. If you're facing the threat of foreclosure, there are two ways in which to negotiate with your lender. One is known as Loan Modification, if you've been on the internet at all, you have probably seen a pop up ad or link regarding loan modifications. While there are some reputable companies that perform loans mods, many are, for lack of a better term, scams. Most of a loan modification request process you can handle yourself if your mortgage company is in agreement and willing to work with you. Forms can be found easily on the internet. Recently I conducted a search on Google "free loan modification forms" and yielded several sites that offer free or sample forms. Typically, the information needed to complete these forms are two recent pay stubs, recent bank statements, a letter explaining why you have become delinquent, for example: job loss, sickness, loss of income, etc. You will also need a financial budget in order to show the bank your income and expenses. Additional information may be required, but again, generally speaking the form completion and negotiation you could handle yourself, saving yourself hundreds, sometimes thousands in loan modification fees versus using a vendor. Another method of exiting a potential foreclosure is called a short sale. A short sale is an amount that the bank is willing to accept for the sale of your home in lieu of foreclosure. In other words, the lender may accept less than payoff. A short sale typically keep you in your home, however, it does prevent foreclosure and further damage to your credit history. Banks are not in the real estate business, they are in the lending business. If they have inventory, it is costing them in maintenance, servicing, fees, etc. The quickest resolution for both parties is to sell the home and forgo any further foreclosure process and process. Recently, a client of mine mentioned that they were facing foreclosure and wanted to take the home off the market. After discussing options with them and a few calls to the mortgage company, we were able to keep the home on the market and given time to seek a short sale buyer. While foreclosure is an emotional and frustrating experience, there are ways to seek relief and prevent additional damage to your credit. If you're facing foreclosure, seek counsel with your mortgage company or an experienced real estate agent who is familiar with the process. Don't give up. I invite you to contact my office to discuss your options.

165 Market Street, Cheraw, South Carolina 29520
telephone: (843) 537.0286