There are a number of ways that your lender can help you solve your payment arrearages with them. Below, are several avenues for working with your bank.
Deed in Lieu
This is when you voluntarily give the bank back your deed to the property. This can help them avoid having to go through the foreclosure process with you and save a lot of money and time. “In Lieu” means instead of! So you would give them your deed to the property instead of them foreclosing on you. There are still credit blemishes that can occur for you but it is a definite way to take care of things much quicker. Many lenders require that you have the property listed for 90 before they will consider this direction. You may also owe an amount for the difference if your bank can’t sell your property later for the amount you owe them!
Short sale
A short sale is when you get your bank to accept less than what is owed as payment in full. Almost all banks will do this. Some don’t but the vast majority does. Banks need to liquidate these properties quickly without having to take them all through foreclosure or lenders would all go out of business. By offering them a short sale offer, your lender is actually saving a lot of money by taking a discount now instead of waiting six to nine more months to foreclose. Many would rather take a loss now and get what they can instead of not receiving any payments for that long stretch of time, pay attorneys for their work, take the property back and then try to put it on the market with the likelihood that it won’t sell for a long time anyway. Plus, if a house sits vacant for along time, it will more than likely get vandalized no matter where it’s located. This can be much more appealing to a lender instead of the alternative. Banks sometimes require that the property be listed before they’ll consider this option. You must secure a buyer for your property so you may want to place some adds for it in the paper, have it listed as mentioned above, or contact some investors in your area to see if they’ll make an offer on it.
Repayment Plan
This is a payment plan that you work out with your lender. Every bank is a little bit different with how they want to work out the details. They may want some money put down to begin, and then they’ll accept payments for several months until you have caught up everything. This amount is over and above your normal monthly payment that you’re already making to your lender. It’s very important to keep all payments current from this point on. If you don’t, your lender can start up the foreclosure process again and take your property to auction.
Forbearance agreement
During forbearance, your lender will hold off on enforcing any legal action for a specific period of time. This can help you if you’re starting a new job or you’ll be having an income tax refund come in soon, etc.
Loan modification
This is where the lender agrees to modify one or more terms of your loan to better help you handle your payments in the future.
These again are several programs that your bank can help you with, in order to remedy your payment problems. Don’t be afraid to talk with you bank to find out what they can do to help you. They know that times are tough out there and this wasn’t done intentionally, so if you ask them for some solutions that they might have, they’ll usually be very open to sharing them with you. Try to be courteous and try to find a friendly ear and always remember that it’s in your banks best interest to get your loan performing again!
To your success and serenity,
Rand
P.S. For more information, tips and strategies to help you overcome this hurdle, go to www.FreedomFromForeclosureNow.com
