A question I am asked frequently is “How can I avoid foreclosure?”
Foreclosure is happening across the spectrum in this market. Starter home owners and million dollar home owners face the same question. Avoiding foreclosure in Atlanta is a complex task and there are options for the distressed property owner.
The truth is foreclosure can be avoided in many instances. Foreclosure is a devastating financial challenge and families need to know and understand their options.
During 2009 I obtained my CDPE (Certified Distressed Property Expert) designation so I could better serve families in the Atlanta area who face foreclosure. I had already been working with many families on short sales and other foreclosure avoidance measures. Thankfully, the folks at CDPE offer many good resources for dealing with families who own distressed property.
Here are some CDPE foreclosure avoidance solutions that might work for your family
1. Reinstatement – A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.
2. Forbearance or Repayment Plan – A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
3. Mortgage Modification – A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.
4. Rent the Property - A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, can convert their property to a rental and use the rental income to pay the mortgage.
5. Deed in Lieu of Foreclosure – Also known as a ‘friendly foreclosure,’ a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.
6. Bankruptcy- Many have considered and marketed bankruptcy as a ‘foreclosure solution,’ but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.
8. Service Members Civil Relief Act (military personnel only) – If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Service members Civil Relief Act. The American Bar Association has a network of attorneys that will work with service members in relation to qualifying for this relief.
9. Sell the Property – Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.
10. Short Sale – If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.
Understanding your options now could mean all the difference in the world.
SALLY ENGLISH AND THE ENGLISH TEAM Help Atlanta Families Avoid Foreclosure – My team is ready to go to work helping your family avoid foreclosure. We know the ropes and can guide you through these turbulent times. Call us at 404-229-2995. We do not have “operators standing by” You will have your call answered by me, Sally English, and I am ready to deliver personal service to you and your family.