Facing Foreclosure?

 

Are you receiving numerous letters and phone calls from your mortgage company?

Are you concerned that your home value may be “under water” and you are “over your head?”

Have you avoided contacting your loan servicer to discuss your options?

If you have answered “yes” to the questions above, chances are that you are frightened about the possibility of losing your home. In these tough economic times, many homeowners find themselves in precarious situations with regard to mortgage debt. The loss of a job can certainly destroy the ability to make mortgage payments for many, and the short sale is one solution to selling a home that can no longer be maintained financially. A short sale is essentially when a lender (the bank or mortgage company) accepts less than what is owed on the home. However, this is not always an option. If a home is in tip-top, move-in condition inside and out, the homeowner has a good chance of opting for a short sale. This does not guarantee, however, that either seller or a lender will accept a short sale. Often, it makes more sense for a lender to foreclose. A house in excellent condition will command a higher dollar and both the lender and seller know this. When the seller is many months behind in house payments and is unable to catch up, they are often forced into a short sale situation. The lender has the option of selling at either market value or as a short sale.

 

Click here to have a Gitta Sells & Associates specialist assist you.

 

Terms & Definitions

 

Loss Mitigation
This is a process to avoid foreclosure in which the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on the mortgage loan.

Loan Modification
A loan modification is a permanent change in one or more of the terms of a borrower’s loan which if made, allows the loan to be reinstated and results in a payment the borrower can afford. Modifications may include a change in the interest rate, capitalization of the delinquent principal, interest or escrow items, extension of the time available to repay the loan, and/or re-amortization of the balance due.

Short Sale
This option allows a borrower in default to sell his or her home and use the sale proceeds to satisfy the mortgage debt even if the proceeds are less than the amount owed. This option is appropriate for borrowers whose financial situation requires that they sell their home, but who are unable to sell without the insurer/guarantor relief because the value of the property has declined to less than the amount owed on the mortgage.

Foreclosure
The legal process by which an owner’s right to a property is terminated, usually due to default. Typically involves a forced sale of the property at public auction, with the proceeds being applied to the mortgage debt.

REO
Real Estate Owned. (Also referred to as Bank Owned.) Property which is in the possession of a lender as a result of foreclosure or forfeiture.

 

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Resources

http://www.makinghomeaffordable.gov/pages/default.aspx

http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure

http://www.financialstability.gov/ 

http://www.ftc.gov/bcp/edu/microsites/moneymatters/your-home-foreclosure-rescue-scams.shtml

http://www.hopenow.com/