Stop Foreclosure

5 Ways To Stop, Avoid or Postpone Foreclosure in Arizona

1.  Loan Modification

One thing you’ll see a lot about in today’s market are loan modifications.  Banks are encouraged to take steps to modify for borrowers before they pursue foreclosure.  It’s in their best interest after all.  In this case, homeowners negotiate with the lender to get a lower monthly mortgage payment.  This can be done by modifying the principal balance or the interest rate on the outstanding loan.  Check with your lender for details. READ below:

* AKA “an accelerated collection process” for the Lender! If the Lender approves your Modification (2.4%), it is a typically for a trial period only; usually 3 months and they will re-evaluate after this period if they wish to continue with this payment plan.

• Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
• Drawback: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

2.  Home Affordable Foreclosure Alternatives Program (HAFA)

Homeowners who qualify for the HAFA Program can sell their homes under pre-approved short sale terms and receive a cash incentive of $3,000 to apply toward relocation.  You can find a lot of information on various modification programs such as HAFA online.

* Verify with your Lender if they participate in this program. We can contact your Lender on your behalf and begin the process.

3.  Short Sale

With lender approval, the home is sold in a short sale at an amount less than what is owed on the existing loan.  Short sales are now being approved for a variety of reasons under a lot less scrutiny.  Moreover, many banks and lien holders are offering financial incentives up to $30,000 for a successful short sale transaction.  Check with your lender to see if you qualify today.  Just be aware that short sales can take much longer than traditional sales and banks will want a lot of financial information and paperwork and will want updated copies on a regular basis as the loan is processed.

* Many homeowners not only do not open their mail from the Lender, they are scared to call them. We can contact them on your behalf to begin this process or any options you choose or are considering.

• Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual’s public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
• Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.

4.  Reinstatement

In this instance, the homeowner pays the total amount owed to bring the mortgage payments current, including all overdue payments.  To obtain lender approval for reinstatement, the homeowner must be able to prove to the lender that funds are available for repayment and the amount in arrears will be made current within a short amount of time.  Some lenders will negotiate up to 24 months for reinstatement.

* If this seems like a viable option for you, please read # 5 below as the terms can be much more manageable for the homeowner.

• Benefit: Does not require the mortgage company or lender’s approval.
• Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

5.  Forebearance or Repayment Plan

In this case, the homeowner negotiates with the lender to repay the amount in arrears over a specified period of time.

• Benefit: Allows the homeowner to make back payments over time.
• Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.