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Options when facing Foreclosure October 17, 2009

Posted by orlandoshortsalefl in Foreclosre, Foreclosure, Foreclosure in Orlando, orlando foreclosure, Orlando pre foreclosure, Orlando real estate, Orlando Short Sale, Orlando short sale Realtor, Orlando short sales, short sale, Stop foreclosure.
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1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction.  Loan applications generally ask if the applicant has ever been foreclosed upon.  Not the best option.

2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees.  Usually this is accomplished through a refinance of the debt.  New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default.  With this option, there should be equity in the home.

3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees. This is the best option if you have the money and want to keep your home and credit rating.

4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan.  This may allow the homeowner to catch up at a more affordable level.  To qualify, you must prove to the lender you have fixed the problem that caused the late payment and have the income to pay. The lenders usually do not allow a principal reduction.

5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation.  The lender may even be able to provide a temporary payment reduction or suspension of payments.  Information will be required from the lender to show that you are able to meet the new payment plan requirements.

6. Partial Claim – A loan from the lender for a 2nd loan to include back payments, costs and fees.

7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing.  Banks generally require the home be well maintained, all mortgage payment and taxes must be current.  Most loan applications ask if this has ever happened. The majority of banks now want a promissory note to do this.

8. Bankruptcy – This option can liquidate debt and/or allow more time.  I can refer you to a qualified bankruptcy attorney.
     –Chapter 7 (Liquidation) To completely settle personal debt.
     –Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.
     –Chapter 11 (Business Reorganization) A business debt solution.

9. Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale.  In this case, the homeowner will get cash from the sale.  On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value. The short sale is the option most of my clients choose.

I posted this in January. I wanted to make sure everyone had a chance to read this. You must know your options before a foreclosure strikes. I am an experienced short sale Realtor. I can show you my recent approval letters. Make sure you ask any Realtor for these letters.

Remember foreclosure is the last resort. Contact me at www.scottnwendy.com or paganorealtor@gmail.com

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Mortgage insurance and a short sale October 15, 2009

Posted by orlandoshortsalefl in Foreclosre, Foreclosure, Foreclosure in Orlando, Mortgage insurance and short sales, orlando foreclosure, Orlando pre foreclosure, Orlando Short Sale, Orlando short sale Realtor, Orlando short sales, short sale, short sale PMI, Stop foreclosure.
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I wanted to post again about another positive transaction with PMI on the Orlando short sale. PMI is NOT a deal killer. I have had other agents in my office tell me if PMI is on the loan they will not do a short sale. This is just crazy. Granted mortgage insurance makes it more difficult but it is not impossible.

First you must retain an agent like myself who has dealt with a PMI company. Agents that have only dealt with the bank will not know what to do when this comes up. Second do not have your agent ask the negotiator if PMI will be a problem. Never bring up anything the bank does not ask for, Never!

PMI does not come up as an obstacle on all short sales. This is based on my experience. If if does come up the negotiations will be with the PMI company. They will take a reduced amount if you have an agent that is a good negotiator.

The mortgage insurance company will generally ask for a promissory note at 0% for some many months. You can consult your tax advisor as well for information on how to take care of this note.

My last point is, Do NOT give up because you have PMI on the loan. I have never had a short sale turned down over PMI. Remember foreclosure is the last resort. I can help, contact me at www.scottnwendy.com or paganorealtor@gmail.com