Did You Know?

Many borrowers in Arizona and around the country have fallen behind on their mortgage payments from a variety of reasons.  When the bills start to pile up a lot of people get overwhelmed and have no idea what to do or where to turn. 

Sometimes a financial hardship is permanent.  In this case your best option may be to sell your home.  A good hand full of people may have negative equity due to a reduction of real estate values.  You may still sell your house with a realtor experienced in Short Sales.  This is where the bank takes the loss on the difference of the loan amount and the market value of the home.

There are solutions though that will help save someone from foreclosure if their financial hardship is temporary.  You should contact the lender and ask for the Loss-Mitigation department.  The loan counselors in this department can offer alternatives to a foreclosure.  Some of these options include:

• Forbearance
• Loan Modification
• Repayment Plans
• as a last resort Cash Advance from the mortgage insurer to the Lender who agrees to deduct the advance from a claim if the loan becomes a claim in the future.

Rather than forclosing on a home, lenders have found out that this is a more financially beneficial option for themselves and the borrower that has a desire to get out of the position they are in and save their home.  The next post I will cover in more detail what the first 3 options are.  Please don't hesitate to call or email me with your questions.  If you know someone that is in the market for a home or looking to refinance, I would greatly appreciate your referral.  - Jon Weber

This message will offer a brief summary of the 3 options to saving your home to a foreclosure.

• Forebearance- Is an agreement in writing between the Lender and the borrower not to initiate the foreclosure proceeding in exchange for a promise to make regular payments in the future.  This agreement will be made for up to a year depending on the circumstances and what the borrower is doing to remedy the financial problem.
• Loan Modification- This will permanently modify the terms of the loan; loan amount, term, and sometimes the interest rate.  There may be escrow fees, attorney's fees, past due interest, lates fees and other smaller appropriate fees totalled up then added to the loan balance of your current loan.  The borrower may have to come to closing with a payment predetermined by the loss-mitigation specialist.
• Repayment Plans- With this method, the borrower will start making a regular monthly payment where part of the payment will be added to the arrears to eventually bring the account current.

Please don't hesitate to call or email me with your questions.  If you know someone that is in the market for a home or looking to refinance, I would greatly appreciate your referral.  - Jon Weber