Thursday, March 15, 2007
Avoiding Foreclosure
2007 will be an active year for foreclosures. With all the "creative financing" that occured in recent years, many folks are in a tough place. If you find yourself in a situation where you are faced with a pending foreclosure, read over your mortgage contract carefully and contact your lender to see whethar a loan workout option is available. Often financial institutions do not want to go through the process either.
Repayment plan- As a borrower, you might be able to resume making regular payments, in addition to paying a portion of the past due amounts until the loan is current.
Mortgage modification- It may be possible to permanetly change the terms or loan balance. Adding the past due amounts to the loan balance and continuing to pay a new monthly amount may be a great fix to the problem.
Sale- You might be able to have the lender delay the filing of the papers in the court house if you put the property up for sale. However, in today's market, the home may not sell for what you owe on the loan. This is what is called short sale or upside down condition.
You may be approached by an investor offering to purchase your property during the pre-foreclosure stage. Give this careful consideration. The investor is looking to acquire the property under market value, however, you may actually benefit as well by receiving more for the property than the auction at the court house would bring while actually receiving some of the equity gain.
Repayment plan- As a borrower, you might be able to resume making regular payments, in addition to paying a portion of the past due amounts until the loan is current.
Mortgage modification- It may be possible to permanetly change the terms or loan balance. Adding the past due amounts to the loan balance and continuing to pay a new monthly amount may be a great fix to the problem.
Sale- You might be able to have the lender delay the filing of the papers in the court house if you put the property up for sale. However, in today's market, the home may not sell for what you owe on the loan. This is what is called short sale or upside down condition.
You may be approached by an investor offering to purchase your property during the pre-foreclosure stage. Give this careful consideration. The investor is looking to acquire the property under market value, however, you may actually benefit as well by receiving more for the property than the auction at the court house would bring while actually receiving some of the equity gain.
