If you have been denied for a loan modification it is not the end, but it is an uphill battle that you need help from a professional to fight. We know the stress involved when you are in default and you can't make ends meet. We really want to help. Everyday more homepwners are finding themselves in a position where foreclosure is possible or just a matter of days away. In a few instances homeowners are able to refinance their loans. Many people, even if they are not behind on their mortgage, are trying to modify their loans. No matter what the government does to assist homeowners facing foreclosure, some mortgages fall through the cracks and they are denied a loan modification. If you want to save your home from foreclosure you need to know what lenders are looking for in order to qualify for a loan modification. Many homeowners are being denied a loan modification because they do not know the guidelines set by the government and their lenders. We understand what it takes to qualify for a loan modification and also offer foreclosure options because not all homeowners will qualify. If you are denied for a loan modification because your lender said that your investor does not allow loan modifications or you do not qualify your options are limited.
which include full reinstatement or repayment plan with a substantial contribution (down payment). When making a decision on what to do you need to take the emotions of losing your home out and make a decision more like a business decision. The reason for changing your mind set is because there is a strong chance you are upside down in your home and tacking on past due payments will only put you deeper in debt.
The economy has changed in the last few years and I have heard that over 30% of homes in America are upside down. Homeowners are walking away from homes when that is the worst possible scenario. We know that the lenders are battering already hurting homeowners with the collection calls. It is causing homeowners to give up and get angry with their mortgage company.
We can help no matter if you want to save or sell your home we are equipped and experienced in assisting. If you want to save your home there are some considerations. If you have defaulted on your loan and you qualify for a loan modification they will tack the past due balance and any other fees and cost including attorney fees to your loan. I have had a problem with this process from the beginning if you think about the process. If your loan is modified you will pay interest on the defaulted amount that is rolled back into your loan. When you get a loan the interest is front loaded and the majority of your payments go toward interest. Now the bank is going to roll the past due (interest payments) back into your loan and you will pay interest again once your loan is modified. That may not seem bad if you have
One in five homeowners nationwide is upside down on their mortgage. Every day more people are finding themselves in a position where foreclosure is an option. Some homeowners are able to refinance their loans. Many people, even if they are not behind on their mortgage, are seeking loan modifications. Nevertheless, some mortgages fall through the cracks and either modification or refinance are not feasible options.
Many homeowners are unable to refinance because their homes lack the necessary equity. Some people will not qualify for a loan modification. For homeowners unable to take advantage of either of the above options there is another option they may want to consider, a forensic loan audit. If a loan modification or refinance is not achievable or realistic, your options come down to these:
Sell the house. If the home has enough equity to allow the homeowner to pay off the mortgage in full, after deducting any real estate agent commissions, then a quick sale is usually the best option. Homeowners will preserve what's left of their credit score and equity, leaving them in a much better position should they want to buy another home in the future.
Offer a deed in lieu of foreclosure. If a homeowner cannot sell the house for what they owe, but they are not deeply "upside down" on the mortgage, this may be an option: A homeowner will propose handing over the deed to the home and the lender agrees to release them from their mortgage. This usually keeps a homeowner from having to pay any shortfall that might be owed on the property, while the lender avoids further legal costs related to a foreclosure.
However, lenders cannot be forced to accept a deed. Typically, lenders require that the borrower make a significant effort to sell the home first and show that their delinquency was due to unavoidable hardship before they'll agree to a deed in lieu of foreclosure.
When lenders accept a deed in lieu of foreclosure, the borrower’s financial obligation to the lender ends. A deed in lieu normally will not affect a borrower’s credit score and will show paid as agreed on a credit report. Any late payments on the mortgage before the deed in lieu is accepted will negatively affect credit.
It is possible for homeowners to do a deed in lieu transaction by themselves but it is not recommended. The deed in lieu process needs to be done correctly to ensure success. There are companies that will assist homeowners through the deed in lieu process for a fee. To get help with the deed in lieu process look for real estate loss mitigation companies. These companies specialize in helping homeowners negotiate with their lenders.
Negotiate a short sale. If a homeowner owes substantially more on their home than it is worth, they may be able to get the lender to accept less than is owed by negotiating a "short sale." A homeowner will essentially sell the house for whatever they can get, and the lender agrees to accept the proceeds and not go after them for the deficit. Offers on short sales must be within a realistic price range or the lender will not accept the offered price—meaning a homeowner cannot sell the house to a relative for $1.
A short sale can damage a homeowner’s credit scores, often showing up as a "settlement" that indicates they paid less than owed. They may also face an IRS bill on the unpaid debt, which is generally considered income. A skilled negotiator may be able to avoid these consequences or at least minimize them, so homeowners may want to consider getting an experienced attorney or a real estate loss mitigation company’s help.
Homeowners can negotiate a short sale themselves but it is not recommended. Short sales take a long time to complete so homeowners should seek professional help from a real estate agent, attorney, or real estate loss mitigation company to avoid financial complications and facilitate the process.
Allow the foreclosure to proceed. This is generally the worst choice. In some states and in some circumstances, the lender can even go after a homeowner in court for any deficit between what the house eventually sells for and what they owe. An attorney or housing counselor can let you know if that is a possibility.
Every option available to the homeowner should be exhausted before losing their home to foreclosure. A foreclosure significantly damages credit scores, remains on a credit report for seven years, and significantly affects a homeowner’s ability to buy another home. Most lenders will not consider a borrower who has a foreclosure on their credit reports qualified to borrow money for a new home for at least 2 years after the foreclosure is discharged.
Even if a homeowner is unable to refinance or modify their existing note, there are still options to foreclosure. If a homeowner is turned down for a modification, they should contact a real estate professional or attorney for help in determining their options to foreclosure. Real estate loss mitigation companies are a good place to find information about options to foreclosure.
Having options explained does not cost money; do not pay upfront fees. Homeowners, before making a decision about what option is best for you, make sure you understand your choices fully. Some companies that specialize in short sales or deed in lieu transactions may not fully explain all the available options. Do not let someone railroad you into something that does not work for you.
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