“I’d like to sell my house and it may be a short sale, but I don’t want to announce my situation to the world.”
If this is how you are feeling, then contact us today. At NJRETODAY, we understand that falling behind on mortgage payments is downright a difficult thing to bare. Most Americans want to pay their bills and keep up with their payments, but sometimes circumstances may not allow you to move on with your life.
When you fall behind on your mortgage payments, you might feel stuck and even downright demotivated about life in general. The best thing to do when you can no longer afford your housing payments is to consider a discrete short sale, but only after you have exhausted all other foreclosure prevention options.
Foreclosure Prevention Options
I am more than happy to be your real estate hero. Selling short or short selling a house is not a positive thing for the real estate market. It’s not good for your family, the community and your overall well-being. Keeping homeowners in their home is one of my top priorities as much as it is to help homeowners move on when they’ve had enough.
Here are some of your foreclosure prevention options.
- Loan Modification
- Deed in Lieu
- Deed for Lease
- Discrete Short Sale
Foreclosure Prevention Option 1: Loan Modification
If you are struggling to make your mortgage payments or can’t take advantage refinance with a lower interest rates because your home has dropped in value, you may be eligible for the Making Home Affordable Program, which is the first loan modification program offered by many lenders to delinquent homeowners. If you do no qualify for the Making Homes Affordable Plan, your lender may allow a temporary forbearance (a period of time in which you do not have to make payments). Your lender may even help you devise a repayment schedule that will put you back on track.
A Loan modification can be negotiated by you and your lender without the help of a 3rd party negotiator. I wholeheartedly believe that to negotiate directly with your lender can be a mistake, especially without the assistance from an agent like me or an attorney to protect your interests.
Banks are in the business of making money and when you call to speak to your lender, you are immediately reminded that your bank or loan servicing company is there to collect a debt. The information you provide to them can be used for those purposes: to recollect missed payments.
Call me paranoid, but I feel like a lender would rather you do not hire your own representation because their primary goal is to collect a debt and with formal or legal representation from a real estate agent or a real estate attorney, they know it might hinder their ability to collect the debt, which may delay future payments. It’s as if they prefer that you do not have your own form of advocacy because the more educated your are, the harder it will be for them to seek favorable terms for their position.
Oftentimes, loan modifications are temporary solutions. The principal on the loan is generally not forgiven. In fact, some loan modification programs have conditions such as increasing interests rates, balloon payments and may even have an acceleration clause that is meant to keep you paying while your bank works to sell your loan or even start foreclosure proceeding. That’s where I come in. I often read the proposals given to you by the bank to help you evaluate how you should proceed.
One effective way to get a permanent loan modification is to do what we call a loan audit. Please check back to this page called options for delinquent homeowners for more information on loan audits. We will describe what it is and how you can obtain one in the next coming weeks.
Foreclosure Prevention Option 2: Deed in Lieu of Foreclosure
If you cannot sell your home in a reasonable amount of time, your mortgage company may allow you to voluntarily transfer the deed to the property to the mortgage company. In which case, the house is sold and the same three conditions from option 4 may apply or affect you. Some banks or loan servicing companies may offer you cash for your keys. Foreclosure is a lengthy, costly process for lenders and in some cases, they would rather liquidate the home and provide you with moving money to get you out of the home, which is generally referred to as Cash for keys.
Foreclosure Prevention Option 3: Deed-for-Lease Program (D4L)
D4L allows eligible borrowers facing foreclosure (or their tenants) to stay in their primary residences. Under D4L, the borrower transfers ownership of the property to the lender through a deed-in-lieu of foreclosure and the borrower (or the tenant) signs a lease for up to 12 months. The program is designed for borrowers who don’t qualify for other workout solutions, including modifications, or who do not meet their obligations under the modification. The purpose of the program is to minimize displacement of families and deterioration of neighborhoods that often occurs when homes are left vacant. The rent may not exceed 31 percent of the family’s gross income. Fannie reserves the right to market the property during the lease term and may sell it to an investor during leasing period. Homeowners with 2nd or 3rd mortgage generally do not qualify for a DIL.
Foreclosure Prevention Option 4: Discrete Short Sale
If your home is currently under water, you do not have sufficient assets to satisfy all liens against you or your home, and you are experiencing some type of financial hardship, you might qualify for a discrete short sale. We define a discrete short sale as one that is hassle free, meaning you do not have to place a for sale sign on your lawn or have multiple showings at all hours of the day during the week. My team regulates when showings take place and we use a bid system so that we can guarantee that your home gets the highest and best offer within 30 days or less. This way you can focus on moving on with your life. In fact we negotiate on your behalf to secure a relocation fee of up to $3, 000, which is subject to your lender’s approval.