In the face of losing a home to foreclosure, homeowners are at their most vulnerable. Add job loss or looming unemployment possibilities on top of that and one can’t help but feel powerless over their destiny. There’s no magic bullet to fix either the economy or your personal circumstance, but giving up is not an option until all others have been explored.
The options that should not be explored are the ones offered by shysters who are allegedly helping people remain in their homes and “solving” their mortgage problems. This state of the union has bred many opportunists who are simply taking advantage of distressed homeowners only to fill their own pockets. Again, there is no magic bullet.
As far as options, the differences between foreclosures and short sales are probably pretty clear to most at this point. Contact us if you need guidance in those areas.
Some of the other alternatives for distressed homeowners include:
- Refinance
- If you are current with your mortgage payments you may be eligible to capitalize on the current interest rates.
- Lender Workout
- You don’t know until you ask…some lenders are making things work by forgiving back payments, adjusting interest rates, and even recasting existing loans.
- Sell and Bring Cash to Closing
- You can avoid foreclosure by making up the difference to the bank if you sell your home for less than it is worth, but still make good on the debt. Some homeowners are reaching into IRAs and the like to liquidate assets for this purpose.
- Deed in Lieu of Foreclosure
- This is not a viable option in all markets, but you may be able to literally trade in your home in exchange for the cancellation of the debt. In this scenario be certain to ask the bank to release the deficiency so you are free and clear.
Each of these options may have potential issues and may carry eligibility restrictions. Your first steps are to take full stock of your situation and then contact both an experienced distressed property Realtor and your lender. The thing not to do is wait…if you are a homeowner in trouble; time is not going to cure what ails you.