Help to Avoid Short Sale
If a borrower is in dire financial straits, he or she may be unable to make the house payment. Before such an individual misses a number of payments resulting in the bank foreclosing on the property, other options must be considered.
The first viable course of action that a borrower must undertake is to attempt to keep the property by talking to the lender. A loss mitigation department is one of the entities that may be able to help. Keep in mind that the contact details on payment vouchers may be those of the customer service provider, and not the investor or lender of the loan. An owner must contact the appropriate people and explain the details as to why payments on the property have been missed, or will be missed in the future. Many homeowners possess the mindset that they cannot work with the lender to resolve the issue. The lender needs the money from the payments, and not the property itself.
Loan modification, or restructuring of the payment scheme and terms, is one option that a property owner should consider taking up with the lender. Loan refinancing is not always necessary. Loan modification will only serve to modify the existing loan’s terms. All of an owner’s credit and other relevant financial information will be open to examination and scrutiny by the lender before the borrower can be approved for this process. The loan balance may be augmented with the amount of any missed payments. The borrower needs to sign his or her name on documents for the agreement before changes to the monthly payment take effect.
A repayment or special forbearance plan may serve to mitigate the effects of a homeowner’s missed payments. If a borrower can currently afford to shell out money for payments, but was unable to pay for a number of payments in the past, this option is feasible. Foreclosure may be delayed by the insurer, investor, or lender if the individual promises to make up for the defaulted payments. All pertinent financial details must be submitted by the borrower before his or her case is studied for approval. The current amounts for payment will incur additional amounts from the missed payments up to the point that the account returns to a good standing.
About Moe Bedard
I am the founder of LoanSafe.org, LoanWorkout.org and CEO of MoeSeo Inc. My work has been featured in the New York Times, LA Times, Fox Business and many other media publications. My goal is to help people with my websites and restore hope through the internet. I was born and raised in Southern California and currently reside in Temecula, California with my wife and five children.
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I found your site and found it very interesting, my daughter and son in law have been trying to modify their home home loan, they did not miss any payments but it was increasingly hard to make the payment because of the housing downturn. They were referred to a modify your mortgage company by a friend. They quickly found out that the company just took their money $3500 and did nothing. So my daughter contacted the mortgage company herself and explained the situation, they did put her in the system and lowered the payment. She was delighted but after five months they declined the modification, they said they could verify her husbands income but because she is a server in a dinner house they could not verify her tips. She reapplied after having her employer show all of her tips on her payroll check. The mortgage company came back later and declined that because they said she needed to make a substantial amount of more money, We as her parents said we would move in and pay them rent if the mortgage company would take that as added increase to their income. The employee at the mortgage company that talked to her said that would be considered more income. So she applied again, this time they turned right around and declined it without much of an explanation. The problem is that when they gave her the lower payment that she could make and then turned around after so many months and declined it again they want her to make the full payment plus pay them in full all the additional money from the lower payment they gave her to the full payment it originally was. About $22,000. There is no way they can do this. This whole process has taken about a year from the first company she went through to modify her mortgage to doing it herself with the mortgage company. Her next step is to have a consultation with a lawyer. She has talked to one and they asked her to bring her original loan agreement so they can go over it and see if they can find anything wrong with it. They pay a 7 1/2 percent interest rate and they only want the mortgage company to make their loan more affordable. Their house is worth close to their loan amount but if they had to short sell it they would lose all their equity which is about $200,000. Any suggestions would be greatly appreciated.