REAL ESTATE 2010

Foreclosure is the last option for homeowners that give up on their house. Homeowners behind on house payments may feel like foreclosure is the only way to go. Many homeowners in this situation simply vacate the property and stop communication with their lender. Sound familiar? Read on ...

Scam artists are preying on desperate homeowners and many so-called foreclosure rescue companies or foreclosure assistance firms claim they will help you save your home. Some offer a money back guarantee.  Unfortunately, most of these foreclosure fraudsters take your money, leave you flat and don't do what they said they would do. Save yourself money and stress by avoiding any business that: 

• Advises you not to contact your lender, lawyer, credit or housing counselor and “Guarantees” to stop the foreclosure process—no matter what your circumstances
• Collects a fee before providing any services and accepts payment only by cashier’s check or wire transfer or encourages you to lease your home so you can buy it back over time
• Tells you to make your mortgage payments directly to it, rather than to your lender
• Advises you to transfer your property deed or title to it
• Offers to buy your house for cash at a price that is below market and offers to fill out paperwork for you
• Pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand 

There are legitimate options a U.S. Department of Housing and Urban Development (HUD) approved housing counseling agency may review with you when it comes to working on keeping your home. Remember: You need to be able to afford making payments and the lender has to agree to the program.  

• Forbearance – an agreement to suspend or reduce normal monthly payments for a fixed period of time. At the end of the forbearance period you must pay all overdue amounts through a lump sum payment or a long-term repayment plan.
• Repayment plan – a written agreement between the borrower and the loan servicer where the borrower agrees to repay overdue past due mortgage debt (including late fees, legal fees, etc.) by adding an additional amount to your monthly mortgage payment.
• Loan modification – a written agreement that permanently changes one or more of the original terms of the loan. This may include the interest rate, payment amount, length of the loan or, in some cases, the amount of the unpaid principal balance.

If you have experienced a drastic change in your income since purchasing your home, you may be struggling with the idea of having to move. It can be very frustrating, sad, and even feel embarrassing to be faced with the potential loss of your home. However, the stress of trying to save a home you cannot afford can be just as difficult. If you know you cannot stay in the home there are some options for moving on: 

• Sell the house – unfortunately this may be easier said than done in some areas given our current economic situation. Trust your real estate professional to help you through the process.
• Hardship mortgage assumption – this option allows a qualified applicant to assume title to a property and the mortgage obligation of a borrower who is behind in their payments even though loan documents may not permit assumption under normal circumstances. Any buyer must be approved by the lender to take over the loan.
• Short sale (short payoff/pre-sale/pre-foreclosure sale) – in this option the home is sold for less than the amount necessary to pay off the mortgage loan. Some lenders will accept the proceeds of the short sale as full satisfaction of the debt.
• Deed-in-lieu of foreclosure – a situation in which a borrower voluntarily gives title of the home to the lender in exchange for a discharge of the mortgage debt.
• Foreclosure – if no other options are available for repaying your mortgage debt or selling your home, the best option is to stay in your home through the foreclosure process.

Works Cited: Federal Trade Commission. (6APR2009). Recognizing Foreclosure Rescue Scams. Retrieved 3JUN2009, from Federal Trade Commission - Bureau of Consumer Protection: http://www.ftc.gov/bcp/edu/pubs/articles/naps31.pdf 

Your lender will continue attempts to collect on this debt until the legal process is complete, the court ordered Certificate of Sale takes place and the redemption waiting period has ended. While your emotions can soar into high gear, during this time start saving money to use when you have to move and start over.