Available Programs
The federal government and the mortgage industry established loss mitigation programs in order to help prevent home foreclosures. There are several programs available, and each lender has its own policies regarding the use of these programs. In addition, each program has its own complexities and rules that must be followed.
Because of our extensive experience, as well as our close working relationships with mortgage lenders, we are able to help you successfully navigate through those complexities and rules, which may otherwise be overwhelming for you as you work to save your home.
First, we perform a thorough assessment of your personal finances and analyze your lender's loss mitigation policies. Then, our professional loss mitigators will negotiate with your lender to get you the best possible solution to your home foreclosure problem. We can help you save your home through any one of these loss mitigation options:
- REPAYMENT PLAN
A great many people have short-term financial problems and may have no choice but to miss a payment or two on their mortgage. Once that short-term problem is over, they can go back to making their mortgage payment, but they can't come up with enough money to also pay the missed payments.
This is the most common mortgage problem, and a repayment plan is the most common solution. Your lender and you, with our help, set up a repayment plan whereby, in addition to your normal mortgage payment, you also pay a bit of what you owe on the missing payments, until you are caught up.
- FOREBEARANCE PLAN
If you can show your lender that you will be able to pay your mortgage loan after a certain length of time, you may qualify for a special forbearance. Your lender will allow you to make reduced payments for a certain amount of time, or indeed, no payments at all. However, during this time period, interest on the loan will continue to accrue.
The special forbearance is often combined with a repayment plan. - LOAN MODIFICATION
A Loan Modification is "a permanent change in one or more of the terms of a mortgagor's loan, which allows the loan to be reinstated and results in a payment the mortgagor can afford. In other words, your interest rate can be lowered, your remaining balance re-amortized and/or the current term of your loan extended in order to reduce your monthly payment.
There are costs and fees associated with a modification that you will be responsible for, and for which you will have to make an immediate payment.
In order to qualify for a Loan Modification, all property taxes must be current, or you must be participating in an approved payment plan with your taxing authority. If you have any additional liens or mortgages with other lenders - they must agree to be subordinate to the first mortgage.
- VA LOAN MODIFICATION / REFUNDING
The VA Loan is a program set up by the Veterans Administration to help active duty and retired military personnel purchase homes. With a loan through the VA, the home is financed completely, so that you don't have to pay mortgage insurance, and they also set limits on the types of fees that can be charged by your lender. If you're having temporary problems, it is possible to do a Loan Modification on a VA loan.
If your lender will not do a loan modification, but intends to foreclose, the VA also has an option, called "re-funding" - where they will buy your loan from your original lender and re-amortize the loan so you can afford to make the new payments. This is; however, entirely up to their discretion.
- PARTIAL CLAIM
If you do not qualify for a repayment plan or loan modification, you may still be able to obtain a partial claim - if your mortgage is through the Federal Housing Authority (FHA).
With a partial claim, you are taking out an interest-free second mortgage through HUD to assist you in paying the first mortgage.
As the HUD website puts it: Under the Partial Claim option, a mortgagee will advance funds on behalf of a mortgagor in an amount necessary to reinstate a delinquent loan (not to exceed the equivalent of 12 months PITI [principle, interest, taxes and insurance]). The mortgagor will execute a promissory note and subordinate mortgage payable to HUD.
FHA mortgage holders may qualify for a partial claim if their loan payments are more than 4 months, but no more than 12 months overdue, and they have the proven financial stability to begin meeting their payments.
- DEED IN LIEU OF FORECLOSURE
If you have had your home listed with a real estate agent for at least 30 days, with no success in selling it and if it is in sellable condition, and if there are no claims or liens against it - other than your mortgage, of course, you may be eligible for a "deed in lieu of foreclosure."
What this means is that you transfer the deed of your house to your lender, so they do not have to foreclose on the property. They obtain ownership of the property immediately, and the remainder of your debt is forgiven. Note that this program does not save your house.
- SHORT PAYOFF
A "short payoff," also known as a "short sale," or a "pre-foreclosure sale," is really the option of last resort, and requirements to have this occur are very stringent. Loss mitigation companies are not authorized to approve such loans - only the lender can do it.
It is defined as "A sale in which a lender allows the property securing a mortgage or deed of trust loan to be sold for less than the existing loan balance, due to factors such as the borrower's financial circumstances, the property's physical condition and local real estate market conditions." The money thus gained from the sale belongs to the lender. The homeowner cannot benefit financially from a short sale.
To qualify for a "short sale," you must have suffered a long term financial hardship - for example, you or an immediate family member have suffered a catastrophic illness, your employer has transferred you out of the area and you're unable to sell or rent the property, you've suffered a disabling injury that precludes you from ever working again, and so on. There are several reasons that lenders will allow a "short sale."
Complete the online form to find out which program will work best for you.