Foreclosure Prevention Options
There are several options that may be available to homeowner who are in default, or about to be in default on their mortgage. The following is a brief summary of some of those options; please contact me for complete details.
Repayment Plan
This will distribute your unpaid payments over a period of time. This will result in a higher monthly amount due, since you would still be responsible for your regular monthly payment as well.
This is normally not an option for most people right now, since many are still facing the same problems that made them unable to afford their normal monthly payment in the first place.
Loan Modification
One or more of the terms of your mortgage loan is permanently changed (i.e.: interest rate reduced, term extended, etc.). This allows your loan to be reinstated as “current” and your past due payments are usually added to the total balance of your loan.
Partial Claim (FHA loans)
A second interest free mortgage is created, which can include up to 12 months of past due mortgage payments. This second loan is paid off at the time the first loan is paid off.
HomeSaver Advance (Fannie Mae Only)
This is a low interest rate loan with a 15 year term provided by the first lien loan servicer to bring the delinquent first loan current.
Home Affordable Modification Program (HMP)
The goal of this program is to get the monthly housing payment (including past due payments, principal, interest, taxes, insurance, and HOA/condo fees) to an amount that is no more than 31% of the borrower(s) total gross monthly income. This is accomplished by changing the note itself and may include a reduction in interest rate, or changing the term of the loan.
Home Affordable Refinance
This program allows borrowers who are current on their mortgage, but in threat of becoming default to refinance their current mortgage.
Short Sale
This option allows you to sell your home and use the proceeds to pay off the mortgage if you are unable to maintain payments, even if the home’s market value is less than the total amount owed. This option avoids the lengthy legal process involved in a foreclosure, is typically less damaging to your credit rating, and avoids the risk of the bank executing it’s right to file a deficiency judgment against the borrower (NV is a deficiency judgment state, check with your state law if outside NV).
Deed in Lieu of Foreclosure
This option allows you to voluntarily transfer legal ownership back to the investor/bank. This option in many cases is more damaging to your credit than a short sale, but less damaging then a foreclosure. Some lenders will only allow a Deed in Lieu of Foreclosure only after an unsuccessful attempt by you to sell the home. In states that allow deficiency judgments (NV does), the lender in many cases will decline the offer of the Deed in Lieu of Foreclosure. This allows them to maintain their right to file for a deficiency judgment against the borrower at a later date.
Should you have any questions or need further information,
please don’t hesitate to contact me, (775) 220-1630
Or visit my blog at www.SellingNorthernNV.com
Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521
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