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Foreclosure and Shortsale Help

Avoiding Foreclosure

The current challenging housing market and tough financial times have left many homeowners in danger of losing their homes.  This dire situation can often be avoided if homeowners are aware of their options.

Our agents have the knowledge and experience to help you during this very confusing and stressful time.  Armed with their Certified Distress Property Expert (CDPE) designation, our agents have a thorough understanding of the complexity of the current distressed property market and knowledge of foreclosure avoidance options.

Each individual circumstance is different, so it is important to speak with your lender to discuss your unique options. 


What is a Short Sale? 

A short sale is an excellent solution for those homeowners who need to sell but owe more on their home than what the current market value is worth. In the past, getting an approval for a short sale from you lender has often been difficult and challenging. With the recent changes in lending and policies by the Obama administration, the chance of getting your short sale approved has been greatly improved.

In order to qualify for a short sale you must qualify with one of the following requirements.

 

Financial Hardship- There is a situation causing you to have trouble affording your current mortgage.

Monthly Income Shortfall – You have less money than necessary to afford the mortgage. You will need to supply documentation to the lender showing you cannot afford, or soon will not be able to afford your mortgage.

Insolvency- You have no other source of funds to pay your mortgage.


What is Foreclosure?

Foreclosure is one of the most devastating financial situations that any homeowner can find them self in. Those who are foreclosed upon can see an impact to their credit score of anywhere from 250-300 points for a period up to 3 years, they will also be ineligible for most homes loans for up to 7 years. There are few options available to avoiding foreclosure; however, not every solution is appropriate for each individual situation.   Here are brief details for a few of these avoidance options.

 

What are my options?:

A Short Sale: When a lender agrees to accept less than the balance of the loan at closing.  Once approved, with a qualified real estate agent the homeowner can sell the property. A Short Sale has some impact on your credit score; however it is only for a shorter period than a foreclosure. Often after three years you can reapply for your next home purchase.

A Repayment Plan: A repayment plan means the lender will negotiate with the homeowner to structure a repayment plan for their back payments. This option works typically if you can still make your current mortgage payment.

Mortgage Modification: This involves the reduction of either the interest rate on the loan, the term of the loan, the principal balance of the loan or any combination of all three. Done correctly the result should lower your payment and create a more affordable mortgage.

Deed-in Lieu of Foreclosure: A “Deed-in Lieu”  allows the homeowner to return the property to the lender. This option does require lender approval and the homeowner has to vacate the property.

Refinance:    Homeowners can refinance their mortgage if they have sufficient equity in the property and their credit is still good.

 

Thanks to the Obama Administration a number of programs have been implemented to assist homeowners at risk of foreclosure. These programs can be reviewed at http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure


TIPS TO AVOIDING FORECLOSURE:

  •      Don’t ignore the letter from your lender.   Contact your lender immediately to discuss your options.
  •     Know your mortgage rights! Read through your loan documents.
  •    Learn about foreclosure laws and timeframes in your state.
  •    Understand your foreclosure prevention options. Speak with your lender or a real estate professional to discuss your options.
  •     AVOID foreclosure prevention companies. They will charge you a hefty fee which could be used instead to pay down your mortgage.
  •    AVOID foreclosure recovery scams! Many of these companies promising they can stop foreclosure are taking advantage of homeowners in desperate situations and create even worse financial hardship for them.
 
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Distinctive Properties  |   648 Santa Cruz Avenue, Menlo Park, CA 94025  |   650.328.8881  |   BRE #: 01023392  |   Penelope@penelopehuang.com

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