Options to Prevent Foreclosure

Banks are overwhelmed by foreclosures. Foreclosures numbers are at all time highs for  Homes for Sale in Kennesaw, GA , to Real Estate in Redmond Washington . There are so many foreclosures in some areas that banks just don’t want to foreclose on any more homes. They have threatened moratoriums on foreclosures. This is causing lots of shadow inventory. Banks don’t want foreclosures. They are expensive, and there are better alternatives.

Sell Your Home.  Home owners who have equity, can simply sell their homes as a method to prevent foreclosure. The difficult thing is that most people who are facing foreclosure, don’t actually have equity. Almost one in every four people with home loans have notes bigger than the value of their property. Short sales allow homes to sell that are underwater.

Loan Modification – With the encouragement of federal programs, many banks are willing to consider loan modifications.There are some situations where lenders fradulatently administered loans and are held accountable for reconciling their errors.

Deed in Lieu of Foreclosure — With this foreclosure alternative the distressed home owner voluntarily quit claimes their deed to the bank. It’s rare that Deeds in Lieu of Foreclosure actually happen. It is almost always financially best for banks to approve short sales, but they have a hard time getting decisions made. Banks have a hard time deciding exactly what criteria they will take to accept a short sale because every home is unique.

There are some legal issues regarding deeds in lieu of foreclosures that can also make them complicated. With foreclosures, the junior liens get 0 and are wiped off the record. They don’t get a dime. They lose their lien and their right to foreclose. It takes these debts off of the title. Banks do still have a judicial right to collect their rightful debts. Banks do still have statutory rights to try and collect their unpaid debts. With a deed in lieu of foreclosure, the lender also takes upon themselves any junior liens.

Forebearance — With a forebearance agreement the lender delays his right to exercise foreclosure to give the borrower a chance to catch up on their payments. Only about five percent of people who try and get forebearances are successful. Most people have no idea what things are required to qualify. It is wise to get advice from a non profit HUD approved housing organization to provide information on your foreclosure options. Advise from these organizations is FREE. It is illegal for people to charge for loan modification services unless they have a mortgage license. Make sure you watch out for scams when investigating your foreclosure alternatives.

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