Mortgage Workout Options
Depending on your circumstances, you may have the following options:
A reinstatement plan is the quickest method for preventing a foreclosure but requires a lump-sum payment of the total amount that is past due including late fees and Lender Attorney costs
Similar to the reinstatement plan, however, the lender agrees to let you repay part of the delinquency each month, along with your regular monthly payment. This means your monthly payment will increase, in the short-term. A portion of the past due amount, usually 25- 50%, may be required upfront.
Loan Modification/Loan Restructuring
We perform a complete personal financial analysis to determine what amount you can reasonably afford each month. Then we work with your lender to modify the terms of your loan, e.g. change your current interest rate, term, or amount of your principal balance. Any amount past-due, including interest and escrows are factored into the negotiations and will be re-amortized. Once completed, you will no longer be behind on your mortgage payments, resolving your current crisis.
Given the current lending environment it can be difficult to secure new financing, especially if you have recent late payments on your credit report, but refinancing can still be an option.
Loan Forbearance allows you to delay or reduce payments in the short term, with the understanding that you will bring the mortgage current in the future. This option is typically combined with a reinstatement or repayment plan, provided you can demonstrate your ability to repay in the future.
Only available on FHA loans… Take advantage of the FHA Insurance Fund, we will begin discussions with your Lender to agree to making a one-time payment, using an interest free loan due when you payoff the loan or when you sell the property.
A leaseback, also known as sale and leaseback, is when you sell your home to a third-party or give it back to the Lender and they agree to lease it back to you. This way you can avoid a foreclosure and stay in your home.
Deed-in-Lieu of Foreclosure
A Deed in lieu of foreclosure will allow you to legally turn your house back over to your Lender to avoid a foreclosure. You will sign a new Deed conveying your interest in the property to the Lender. The Lender will save money by foregoing the expense of a public auction and attorney fees and you will forgo foreclosure proceedings.
Short Sale / Pre-Foreclosure Sale
If it is determined that you can no longer afford your home, even after modifying the payment or terms, but you owe more on your home than it’s current value, then a Short Sale may be right for you. Negotiating with your Lender to take less than the amount owed, in exchange for you selling the home, will prevent foreclosure and save the Lender money.