There are many options available to you if you fall behind on your mortgage.  Some of these options your bank will allow and some they will not.  You need to work with a Real Estate Agent that is certified in pre-foreclosure who will explain these options and help you decide which options are best for you and your family.

For starters, here are the ways to avoid foreclosure:
 

Reinstatement:  This is when you give the bank all of the back payments, get current with your mortgage payments, and start making your regular monthly payments again.

Partial Reinstatement:  This is where you would pay a percentage of the back payments (usually half) and then you work out a repayment plan for the rest of the debt you owe.

Repayment Plan:  This is when you make your normal mortgage payment plus an additional amount that goes toward the back payments you owe.  You would do this until you are caught up on all the back payments; the lender will usually give you up to 12 months to do this.  If you use this method, make sure you agree to a plan that you are able to pay and is reasonable for your financial situation; you don’t want to end up right back in the same situation.

Forbearance:  This is when your bank agrees to accept a lower mortgage payment (or no monthly payment) for a short period of time.  At the end of this agreement, you are obligated to bring the account current.

Modification:  The bank agrees to change the terms of the mortgage.  This can happen in multiple ways – reducing the interest rate, or extending the term of the mortgage and adding the arrears to the unpaid principal balance of your loan.

Short Sale:  The bank may let you sell the home even if you owe more than the property is worth, and the bank will agree to accept the lesser amount as payment in full.  You need to work with an experienced Real Estate Agent who is a Certified Short Sale Specialist™ so they can correctly document the transaction and assist you in completing this process with your lender.

Make Whole Sale:  You sell the home and the money from the sale pays off the mortgage and any other liens on the property.  This will only work if your home is worth significantly more than you owe on it.  You need to work with a Real Estate Agent who is a Certified Pre-Foreclosure Specialist™ who will be able to assist you in the quick sale of your home.

Refinance:  This is when you take out a new mortgage to pay off the old one.  This option is sometimes a good one, but many times it is the short term answer to a long term problem.  Make sure to contact a legitimate lender or mortgage person, and be very careful of large fees and higher interest rates.  You also need to be aware of the terms on your old mortgage and identify if there is a pre-payment penalty.

Deed-in-Lieu:  You cannot afford to keep the home, so you deed the property back to the bank.  The bank will not accept a deed-in-lieu if there are other liens on the property.  Be careful and do not do a deed-in-lieu if there is an option where a short sale is possible, or if you have equity in the property.

OTHER THINGS TO REMEMBER

Foreclosure moves very quickly, so you must seek help fast.  You want to understand the timelines and understand that the sooner you seek help, the more options you will have available to you.  There are certain rights you have and laws that protect you as a homeowner in California; you need to consult a real estate agent who knows and understands these laws and is a Certified Pre-Foreclosure Specialist™.  Please do not wait until the last minute to get help!

Foreclosures are on public record and will appear in court records.  Be careful of the people that will approach you once this information is public.  There are many foreclosure scams out there, and there are many investors who might approach and attempt to help you.  In many cases, these investors are breaking the law.  Do not settle for a quick fix to this problem, and do not agree to foreclosure options or scams that you do not understand!  If you decide to refinance or take out some other loan to resolve the problem, be very careful of the fees associated with them and the high interest rates you may end up paying.  As we said before, you do not want to put a short term solution on the problem and end up back in the same situation, but with more debt.  Make sure to talk to a knowledgeable real estate professional that works in foreclosure real estate and is a Certified Pre-Foreclosure Specialist™.

To discuss this report in more detail, please contact:

Brian Fox

Broker - CSSS, CPFS, Realtor

Ameritage Realty

(877) 221-2888 toll free
(714) 580-8099 cell
bfox@ameritagerealty.com