The pandemic the world has suffered brought about many challenges, not the least of which were job losses and income loss, preventing the ability to cover normal monthly expenses like house payments. While relief measures were put into place to save people from losing their homes, these were only meant as a temporary solution. As COVID relief measures start to expire, many people are finding that the ability to delay and postpone payments through mortgage forbearance is coming to an end. If you are in this situation and wondering what can be done, there are a few options available to help you get back on track.
Your Options to Avoid Foreclosure
The first and fastest option for restarting the payments on your home is to do a mortgage reinstatement, sometimes called a loan reinstatement. In order to reinstate the loan, it means paying the total past due amount, or the total missed payments. In order to reinstate the loan, your lender will send a letter with details of what the payment will be and when it is due. They calculates the missed payment and add it on top of the current payment. In order to qualify for this option, you must have employment.
Another option is loan modification. What this entails is adding the missed payments to the back end of the loan, so instead of all the missed payments being due at once, it essentially extends the length of the loan by the number of months missed.
If you do not want to or cannot do these options, you can opt to sell the house to avoid foreclosure. Depending on the current equity and your default status, you can do a regular or equity sale if you have equity on the property, and you have to exit the property, or you can do a short sale if the house is worth less than what is owed or you are running out of time. Contact us to get started with this process if you want assistance to stop foreclosure proceedings quickly!
Another way to go is called a deed in lieu of foreclosure. This is when you give the deed back to the bank and are then released from the ongoing risk of foreclosure, but you may still owe the missed payments. For this to work, you must get qualified by the bank.
If you don’t have any income, you can do an equity sale or a short sale so as not to lose the property to foreclosure. The short sale is not a guarantee, so it depends on how we approach the lender.
Your Credit
If you have a foreclosure your credit is hit very hard and will take 7 to 10 years to be able to own a home again, not to mention the other options for borrowing money are reduced. On the other hand, short sales stay on your credit report for only 2 to 3 years, allowing you to recover much more quickly. If you are in need of support through this difficult situation, know that you are not alone. Our team of experienced professionals can walk you through the process to give you the best outcome possible, so that you land on your feet. Give us a call today at 1-877-200-7707, or contact us!