The exclusion is one of the most disastrous financial problems that a family can face and often can be avoided.
A refund is the simplest solution to foreclosure; but it can be the most difficult. The owner simply asks the total amount owed to the mortgage company to date and pay it. This solution does not require approval of a mortgage lender and return to the day before the final sale of a foreclosure.
Benefit: does not require approval of the lender.
Disadvantage: requires that an owner may pay all subsequent payments, fines and fees.
Interruption or payment plan
Interruption plan or payment plan involves negotiating with the company owner mortgage that allows them to pay subsequent payments over a period of time. The owner usually makes your current mortgage payment plus a portion of subsequent payments they owe.
- Benefit: allows the landlord to make late payment over time.
- Disadvantage: requires the owner to have a financial position to pay not only their current mortgage, but also a part of the arrears. Some mortgage companies will require that the owner has to qualify for the interruption.
A mortgage modification involves reducing one of the following: the interest rate of the loan, the principal balance of the loan, the loan term, or any combination of these. Normally this would result in a lower payment to the homeowner and mortgage more.
- Benefit: reduces payment that an owner is obligated to make on a monthly basis and can reduce the principal balance of the loan.
- Disadvantage: requires that the homeowner has to qualify for the new payment and will often require full documentation. Lender must be actively making changes.
A homeowner who has a mortgage payment low enough that the market rent will allow you to pay, is able to convert their property to a rental and use the rental income to pay the mortgage.
- Benefit: allows property owner maintain indefinitely.
- Disadvantage: there are many problems that can arise with a property rental and rent often does not cover the total cost of ownership and maintenance.
Title in lieu of foreclosure
Also known as a “friendly foreclosure,” a title instead allows the owner to return the property to the lender, rather than go through the foreclosure process. Lender approval is required for this option, and the owner must also leave the property.
Benefit: many times in title instead, the lender will waive his right to a deficiency judgment.
Disadvantage: requires an owner vacate the property, and title instead may be reported to the credit bureaus as a foreclosure.
Many have considered and marketed bankruptcy as a solution to foreclosure, but this is only true in some states and situations. If the owner does not have mortgage debts that cause a deficit to pay their mortgages and personal bankruptcy will eliminate these debts, this can be a viable solution.
- Benefit: does not require approval of the lender.
- Disadvantage: If a homeowner cannot pay your mortgage, bankruptcy just stop – not stop – the process of foreclosure. Bankruptcy can be expensive, it is detrimental to the punctuation of credit and can only be declared once every seven years.
Solution web refinance
If a homeowner has sufficient equity in your property and your credit is still in good condition, you may be able to refinance your mortgage.
- Benefit: In some cases, this will reduce the payments.
Drawback may be that a refinancing mortgage lops goes rise and is an expensive process.
Relief Act Service, members of the Civil Act (military personnel only)
If a member of the armed forces are experiencing financial difficulties due to deployment, and that person can show that your debt began before deployment, they can qualify for aid under the Relief Act “Service members Civil Act”.
- Benefit: if you are qualified, this will reduce payments on all consumer debt plus mortgage payments.
- Disadvantage: military must be asset to qualify.
Homeowners with sufficient equity can list your property with a qualified agent who understands the foreclosure process in your area.
- Benefit: allows the homeowner to avoid foreclosure and harvest some of their actions.
- Disadvantage: in many cases today, homeowners do not have enough equity to sell their property without negotiating a short sale (see next solution).
If a homeowner owe more on their property than it is currently worth, then they can sell their goods through the negotiation of a short sale with your lender. This usually requires the property market and the owner must have a financial hardship to qualify. Difficulties can be simply defined as a material change in the financial stability home owner between the date of the purchase of housing and the date of the short sale negotiation. Troubles acceptable include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced relocation or unplanned and more.
- Benefit: a short sale allows the owner to avoid foreclosure and rescue some of your credit score. This also maintains the exclusion of public record out of the individual and in many cases allow the owner to avoid a deficiency judgment. Borrower can qualify for another mortgage on as little as 24 months (instead of five years for a foreclosure).
- Disadvantage: short sales can be a difficult when an owner is best served by hiring a qualified to lead the way realtor process.