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Problems making my payments?

If your financial life is somewhat upside down and it`s becoming more difficult to meet your obligations, particularly loan payment(s), you have a few options available to you:

  1. Refinancing
  2. Modification of your existing loan(s)
  3. Short Sale
  4. Deed-in-Lieu of Foreclosure
  5. Foreclosure.

There are programs available to assist those experiencing issues paying their current monthly payment: H.A.R.P. – Home Affordable Refinance Program and H.A.M.P. – Home Affordable Modification Program. Information is available at http://makinghomeaffordable.gov. If you`re experiencing problems and wish to protect your investment and remain in your home, you should investigate the Home Affordable Refinance Program. Log on to check your eligibility or seek counseling. If you do not qualify for H.A.R.P., investigate a loan modification "Loan Mod” under  H.A.M.P. by going to the same website. For many years, Loan Mods have been a great tool for borrowers down on their luck. They couldn’t pay the monthly payment and it was usually due to some economic hardship-lost job, illness, etc. The Loan Mod was the safety valve to keep the American Dream alive – a roof over your head you could call your own. Loan Mods have come to the forefront to help many more borrowers suffering in our economic slump. Their situation is different as they realize that they owe much more than their property is worth. Over 85% of borrowers who apply... don’t get a modification approved and for a myriad of reasons: They make too much money or have too many assets, they don’t really have a hardship, just spending and/or credit problems, they fear reprisals for erroneous information given when they originally applied for the loan, they just don’t like doing paperwork of any kind, they lose faith and just don’t follow up on the process, they fail to make the payments agreed to in the forebearance/trial phase, they decide to give up as no one will help them and it’s better to live free until someone knocks on the door or have simply walked away and mailed in the keys. These folks have given up on retaining their home and are done with the headaches for now; however, Uncle Sam, the State taxing authority and the credit companies are not going to make anything any easier (Some exemptions may apply). Walking away could just exacerbate the problem. You should speak to legal and/or tax counsel and after which you might consider speaking to a Real Estate Agent because if a loan modification doesn’t work for you, the next alternative is the Short Sale.

The Government`s Making Home Affordable program has another alternative to assist those interested in a Short Sale and it is H.A.F.A. HAFA is a government-subsidized Home Affordable Foreclosure Alternatives program for distressed homeowners to sell their homes to avoid foreclosure, even if the sales price is not enough to pay off their existing mortgage loans. Under HAFA, a participating lender will pre-approve the terms of a short sale and give the borrower at least 4 months to market and sell the property using a licensed real estate professional. More detailed information about H.A.F.A. Short Sales is available under my H.A.F.A. Fact Sheet Link icon.

Deed-Lieu of Foreclosure allows a mortgagor in default,  who does not qualify for any other Loan Mitigation option, to transfer title back to their Lender. There are specific guidelines and exemptions for the Deed-in-Lieu process which you should investigate further, generally, the Deed-in-Lieu  must be completed or foreclosure initiated within six (6) months of the date of default, unless the mortgagee qualified for an extension of time by first trying a different loss mitigation option or an extension of time was approved by HUD prior to the expiration of the time requirement. If the Deed-in-Lieu follows a failed special forbearance agreement or the preforeclosure sale program, then the Deed-in-Lieu must be completed or foreclosure initiated within 90 days of the failure.

Finally, Foreclosure would be the last step and one that you should attempt to avoid at all costs.  There is substantial information available in the links within this website. Everyone is susceptible to hardship which can put us in precarious situations economically. Your best allies when you find yourself in a difficult situation are communication, information and follow through. Communicate with your Lender to determine if you qualify for any of the alternatives that will allow you to remain in your home. Eduate yourself about the alternatives. Seek counsel from your legal AND tax advisors, plus take advantage of speaking to a Realtor who specializes in Short Sales. If you receive advice that you consider sound, follow through without delay. Timing is always crucial in these situations and may be particularly important to the inner workings of the Lender(s) so you want to maximize the  review periods within which Lender(s) can/will act in.

Anyone can experience a setback, however, the short sale endeavor is all about the comeback! Short Sale Sully can help you.