Recent data provided by HOPE NOW, an alliance of mortgage servicers, investors, mortgage insurers, and nonprofit counselors, suggests that alternative solutions to foreclosure continue to become common place, namely short sales and loan modifications.
Loan modifications and short sales are now overtaking foreclosure at a 2:1 ratio. Short sale completions since 2009 now stand at 1.23 million. These numbers show that there is still help out there for homeowners and that the hard work of industry professionals and companies offering assistance are having an increasingly positive influence on the market.
While this is good news for those looking for relief from financial strain it can also lead to an increase in fraudulent transactions. Freddie Mac has put out several helpful tips on how to identify mortgage fraud. The big things to remember are that there are never any guarantees. Companies that promise results are companies to be wary of. Among the warning signs are companies that require upfront payments, “ask you to sign over the title to your home, or charge you rent to stay in your home”.
Other options available depend on your individual financial hardship. Temporary decreases in wages could qualify you for forbearance, a temporary suspension or reduction of your mortgage payment. More often than not forbearance is not the answer. Only a small margin of home owners in a financial hardship can consider it temporary. While forbearances can also be helpful for people facing unemployment it is not necessarily your best option. Forbearances can sometime yield higher interest rates and a larger overall payoff of your mortgage.
Similarly loan refinancing and modifications can offer temporary relief but may not be your solution in the long run. If you are facing a financial hardship and you need to leave your home, doing a short sale can be a great option for you to take control over your situation. Some attorneys may help you do a voluntary transfer of the title of your home to the bank, deed-in-lieu; in order to cancel you mortgage debt. This option should be a last resort if you do not qualify for any other option. However, banks still have the right to pursue you for the debt and a deed-in-lieu does not protect your from recourse.
If you are upside-down on your mortgage payments, short sale is likely your best option. Losing your house to a foreclosure is a process that has many negative implications for your credit, job security, and future buying power. Let Oyezz help you navigate through this difficult time. We can counsel you on all the different options above and help you find a solution that is tailored to your specific needs.