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Stop Foreclosure Options

December 3, 2009 By Homebackers

Stop Foreclosure Options
There are many options today for homeowners who are facing foreclosure to stop foreclosure proceedings against their home. The most important thing is to start seeking help early on before you get too far behind on your mortgage payments. Talk to your lender and explain your financial hardship. Lenders want to help their customers keep their homes. It may also be a good idea to consult with a real estate foreclosure defense attorney, a short sale company or a certified HUD home counselor to find out what options are best for your financial situation. HomeBackers are expert short sale negotiators that can assist you with your options and negotiate a resolution with your lender. Their telephone number is 937-754-1111, and their website address is http://www.ImBehindOnMyHousePayment.com

The following is an overview of stop foreclosure options that are available to distressed homeowners:

Mortgage Modification
A mortgage modification is a modification of your existing mortgage. The purpose is to lower your payment by reducing your interest rate and adding the arrearages to the back end of your loan. Sometimes the lender will also reduce the principal balance. Mortgage modifications take at least a few months to get approved so be patient. You must show you have sufficient income to make the new mortgage payment. So if you are unemployed, a mortgage modification may not be the best option for you.

Refinancing
For those homeowners who have some equity in their home, refinancing is a good option if you currently have a variable interest rate loan. By reducing your current interest rate at least 2%, you will substantially lower your monthly mortgage payment. There are fees associated with refinancing so check around before you choose a loan product. Under the Home Affordable Refinance Program, you may qualify to refinance. Highlights of the Program are referenced below:

The Home Affordable Refinance Program

• Homeowners with debt that exceeds their home value by 5% are eligible for refinancing.
• No prepayment penalties either.
• Loans must be backed by Fannie Mae or Freddie Mac.
Homeowners Who are Not Eligible
• Homeowners whose home values declined severely under 5%.
Homeowners with Jumbo mortgages, which exceed $417,000 are not eligible.

Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is when you simply sign over the deed to the lender, walk away not owing any money and hand the keys over.

Short Sale
In a short sale, you must obtain your lender’s approval prior to selling your home. The lender writes off the remaining loan balance. Be sure to negotiate that the lender cannot go after you for a deficiency judgment. Some states allow the lender to sue the borrower for a deficiency judgment after the sale closes. A deficiency judgment is the difference between what you owe your lender on your mortgage and the sale proceeds. Short sales take about 60-90 days or longer to get approval. It is a great way to get your home sold to avoid a foreclosure on your credit if you have no equity in your home and can’t afford your house payment.

Sell Your Home
Selling your home is an option if you have equity.

Reinstatement
The lender reinstates your loan when you pay all amounts that are in arrears including any fees and costs.

Bankruptcy
Bankruptcy has serious consequences and should be used as a last option to save your home from foreclosure. It is recommended that you consult with a bankruptcy attorney. You may be able to file either a Chapter 13 or Chapter 7. The court automatically issues an order for relief staying or stopping your creditors from any collection activities. This includes postponing any foreclosure sale during the bankruptcy proceedings.

It is important to under the different bankruptcy laws. Chapter 7 wipes out all your debts. In a Chapter 13, you can keep your home, and you agree to pay your creditors via a payment plan.

Don’t despair if you are facing foreclosure, you do have options to save your home. Time is of the essence so act early on before matters get worse. HomeBackers is a Real Estate Solutions Company and are available to assist you. Their telephone number is 937-754-1111, and their website address is http://www.ImBehindOnMyHousePayment.com.

Filed Under: Stop Foreclosure Tagged With: , , , ,

How a Loan Modification Works

December 2, 2009 By Homebackers

How Loan Modifications Work?

There has been a lot of attention in the last six months about loan modifications. Loan modifications are helping millions of homeowners keep their homes. With a loan modification, your lender modifies your existing mortgage to lower your interest rate, transfer any arrearages to the back end of your loan and extend your loan term. The end result is you now have a lower and affordable monthly mortgage payment.

Who Qualifies?
Homeowners who are at risk of losing their home and who are in default. There are several programs available, so you need to check with your lender as to which one you qualify for.

For instance, under the Government’s Making Home Affordable Modification Program, homeowners who are at risk of losing their home can qualify for a loan modification if they meet the following guidelines:
• Have secured your mortgage before Jan. 1, 2009.
• Have a primary mortgage of less than $729,500.
• The home must be your primary residence and you just reside there.
• Must fully document income by submitting your tax returns and paycheck stubs.
• Sign a financial hardship statement.
• Get counseling if your total household debt totals more than 55 percent of income.
• You can only modify your mortgage once under the program.

Loan modifications are a solution only if you have sufficient income to make the monthly payments. If you do not, then other options might work such as selling your home or selling with a short sale.
How Long Does the Process Take?

From beginning to end, a loan modification can take a couple months or longer to get approved. To speed the process up, you may want to consider hiring a professional such as a real estate attorney or loan modification specialist to negotiate with your lender. HomeBackers are industry experts that can help you negotiate a resolution with your lender. Their telephone number is 937-754-1111 and their website is http://www.ImBehindOnMyHousePayment.com.
The reason you should work with loan modification experts is because they are knowledgeable about the process and have established relationships with lenders. If you don’t submit the right paperwork, you may not get approved, and you could end up losing your home to foreclosure.

The costs vary. Some companies charge a fee equal to two months of your mortgage payments, while others charge a flat fee. Shop around. Keep in mind that there are crooks in the industry that may take advantage of your situation. So check references of any loan modification company you decide to hire first to make sure they are legitimate. A certified HUD housing counselor can also help you, and they do not charge for their services. To find a list of housing counselors in your area, check the HUD website at http://www.hud.gov/offices/hsg/sfh/hcc/fc/.
Doing it Yourself
If you decide to negotiate the loan modification yourself, here are some steps to take:

1. Call your lender or loan servicer and find out if you qualify for a loan modification.
2. Download their packet of forms and complete them. If they do not have any forms, then you will need the following:
a. Hardship letter.
b. Authorization letter in case you want a third party such as your lawyer or mortgage broker to have access to your information.
c. Last two paycheck stubs.
d. 1099 or W-2 form.
e. Tax returns for the past few years.
f. Financial statement reflecting your assets and debts and liabilities.

3. Submit the paperwork to the lender for processing.
4. Call every day until a negotiator is assigned.
5. Once your lender approves, your application, you don’t have to accept their first offer. If you are not happy with what they proposed, you can counter it.
The lender is looking to make sure that you have enough income to pay for the new loan payment. So if you are not working or have no income, a loan modification is not for you.
The benefits of a loan modification are you get to stay in your home and not lose it to foreclosure. Your payments are lowered to a more affordable payment. However, if don’t make your payments on time, you will end up in default again, and may not be able to save your home. If you don’t think you can afford the mortgage payments, selling your home or doing a short sale maybe a better option for you. The best advice is to explore all options first before making any decisions. HomeBackers is available to assist you with your options and negotiations. Their telephone number is 937-754-1111, and you can visit them at their website address at http://www.ImBehindOnMyHousePayment.com

Filed Under: Stop Foreclosure Tagged With: , ,

Negotiating a Short Sale that won’t Fail

December 1, 2009 By Homebackers

Negotiating a Short Sale That Won’t Fail

Sellers who are facing foreclosure and have opted to choose a short sale as the method of saving their home from foreclosure are facing two challenges. The first is successfully negotiating the short sale with a buyer that is qualified and willing to wait through the approval process. The second is getting the lender to approve the short sale. By breaking the process down in two parts, and hiring the right short sale experts you will be able to get your lender’s approval, sell your home and avoid foreclosure.

PART ONE

Attracting the Right Buyer
You will need to work with a short sale Realtor who is experienced with the short sale process and knowledgeable about selling real estate in your area. Here is how the process works:

1. List Your Home with an Experienced Short Sale Realtor and Price it Right
It is important to list your home with an experienced short sale Realtor that understands the short sale process because they have sold many short sale properties. Price your home at or below market value. The lender will be obtaining a Broker Price Opinion on your home’s value so you need to price correctly so the lender will approve the sale. Your Realtor can help you by giving you a comparable market analysis of similar homes that have sold in the area to determine the right sales price for your home.

2. Market Home to Buyers/Investors Who Understand the Short Sale Process
Avoid wasting time with the wrong buyer. Time is of the essence to save your home from foreclosure.

The short sale Realtor will market your home to attract the right buyer by advertising the property in the MLS, the Internet and other media such as newspapers, magazines, etc. as a short sale, subject to third party lender approval, so buyers are aware that the property is a short sale. This way there are no surprises. As a result, you will be dealing with serious buyers/investors who understand the short sale process and are willing to wait for the home. This increases your odds that your buyer will not walk away during the approval process.

3. Negotiate Short Sale Contingency With Buyer
Your Realtor will use special language in your contract to make sure that all parties understand that the closing is subject to third party lender approval. All contract contingencies start from approval by the lender. Because of this reason you should only deal with cash buyers. Once your lender approves the transaction, the lender expects the buyer to close in about two weeks from approval. Cash buyers can do this. Buyers who are obtaining financing normally cannot meet such a deadline.

PART TWO

Hire a Short Sale Company to Negotiate With the Lender?
It is crucial to hire a short sale company.

HomeBackers are expert short sale negotiators that can assist you with your short sale negotiations. Their telephone number is 937-754-1111, and their website address is http://www.ImBehindOnMyHousePayment.com.

While some Realtors also negotiate short sales with lenders, it is recommend you use a short sale company who specializes in negotiating short sales and has established relationships with lenders. The short sale company performs the following functions:

Submits all the required short sale package paperwork to your lender so that there are no delays. The short sale package includes your financial information, tax returns, W-2’s or 1099’s and recent bank statements, a financial hardship letter, authorization letter, copy of your purchase and sale contract, and your broker’s listing agreement. The lender must approve the contract and the broker’s commission agreement for the sale to close.

  • Communicates with your lender until a negotiator is assigned and your transaction gets approved. The short sale company has systems in place to speed the short sale process up for you. Generally a short sale takes about 3 – 5 months to get approval or longer. The short sale company communicates with your lender on a regular basis, sometimes daily until the job is done.

The functions of your Realtor and short sale company are completely different, but both need to communicate with each other on a regular basis for your short sale to be successful. The Realtor must also communicate with you and the buyer to keep everyone informed of the status of the short sale process. Many deals fall apart because the buyer is not kept up to speed on the process.

Successfully negotiating a short sale process is a team effort. By hiring a qualified short sale Realtor to market your home to the right buyer and using an expert short sale company such as HomeBackers, who will successfully negotiate the short sale with your lender, you will save your home from foreclosure and your credit. To reach HomeBackers, call them at 937-754-1111 or visit their website at http://www.ImBehindOnMyHousePayment.com. You can then move on to other important matters in your life.

Filed Under: Stop Foreclosure Tagged With: , , ,
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