What Are My Options?
Know the options that you may, or may not, have available to you. Options are intentional actions you can take to try to stop the foreclosure. You may have options and not all of them will save your home. The options you have, have no effect on the case until an agreement is reached and is finalized. The court case continues no matter what option or options you may be working towards. In many individual situations, you may be able to work towards more than one option at the same time. Please understand if you are working with a bank or lending institution on any of the options, they do not represent you and they are not on your side. Also, until an agreement is reached and finalized your case in court will continue and your home is still at risk.
Do Nothing
Once you have been served with a Notice of Foreclosure, you will only have 20 days to respond. If you do nothing, you will lose access to the options listed below and the lender will most likely obtain a "default judgment" from the court. A default judgment will allow the lender to automatically win the foreclosure case against you and proceed with the sale of your property. Doing nothing will accelerate the case against you and will eliminate many of the options you could have had if you fought back.
Reinstatement of Your Loan
Almost all mortgages allow you to pay the past due amount to resolve the foreclosure case. Please note this includes late fees, interest, and any attorneys' fees and costs owed from the lender filing the case.
Mortgage Refinance
You may be able to refinance your home. This means you may be able borrow money from another lender to allow you to pay off your existing mortgage and end the foreclosure case. You can go to any credible bank or lending institution to see if you qualify for a refinance loan. Most of the time, home owners do not qualify because of their credit score. If you have been denied by other lenders for a refinance of your existing mortgage, Kyle & Kyle may be able to help. As you approach this option, there are things you need to consider. For example, you want to be aware of any closing costs and other fees that will be added to your mortgage or required at closing if you were to refinance. Some companies, offer reduced fees or subsidize the costs for you to refinance. You may want to consider contacting the following companies.
Quicken Loans*
Mortgage Warehouse*
RP Funding*
Fairview Lending*
*The presence of these third parties on our site does not represent an official endorsement or recommendation on behalf of Kyle & Kyle. Kyle & Kyle Law is not responsible for, nor does it endorse these third parties. This is for informational purposes only and is not an all-inclusive list.
Loan Modification
A loan modification is a modification of an existing mortgage loan. The loan is modified with the purpose of allowing you, the homeowner, to remain in your home without a past due balance allowing the foreclosure case to be dismissed. The loan can be modified in several ways and each individual loan is unique. The ultimate goal of a loan modification is to reduce your monthly payment to enable you to keep your home with a monthly payment you can afford. When loans are modified, the length of the loan can be extended, the interest rate can be reduced, the overall amount owed can be reduced, or a combination of any or all of these. Keep in mind it is very rare for the amount owed, also known as the total principal, to be reduced. Also, loans can be modified by taking the past due balance and adding it to the end of the loan as a balloon payment with zero interest. A balloon payment comes due at the end of the loan in a lump sum or can come due if the home is sold or refinanced. As you can see, there are many terms that should be negotiated when pursuing a loan modification.
Payment Plan
A payment plan allows your mortgage terms to stay the same but the lender agrees in writing to allow you to catch up on your past due balance. They do this by allowing you to make smaller payments over time, in addition to your regular mortgage payment, in order to allow you to keep your home.
Deed in Lieu
This is an agreement that you sign along with the deed to your home to allow the bank to own your property without court intervention. If you have a pending foreclosure case and decide on this option, your foreclosure case will be over. It is important to understand some of the terms in the agreement can be negotiated. Some of these terms include time you are able to remain in your home before you must leave and the amount of money you can receive in exchange for agreeing to sign your home to the bank. An important term you want in the agreement is called a deficiency waiver. A deficiency waiver prevents you from being liable for any difference between the bank believes your home is worth and the amount you owed on the loan. For example, if you owed $250,000 and the bank believes your home is worth only $150,000, without a deficiency waiver, you could be on the hook for the $100,000 difference.
Forbearance
A forbearance is an agreement by the lender to allow the homeowner to make payments, usually high payments and the interest rate on your loan is increased in exchange for pausing your current foreclosure case. In addition, your loan is capitalized. This means all the past due late fees, interest, and attorneys' fees and costs are added to the principal balance of the loan forcing your monthly interest payments to go up. In addition, most forbearance agreements include terms that do not allow for any missed payments. If a late payment or miss a payment, the forbearance agreement allows the lender to foreclose on your home and takes away any legal rights you had.
Cash For Keys
This is a situation in which the lender negotiates to pay a flat sum of money to the outgoing occupants of a property to incentivize you to leave the property in good condition and to physically depart the property. This may give you breathing room as you plan your next step.
Sell
If your house is worth more than you owe including all the past due late fees, interest, attorneys' fees and costs, and the principal balance, you may be able to sell your home and rectify the foreclose case. In some cases, you could walk away with additional funds in your pocket. It is important that you call the lender to determine the payoff balance so you can accurately determine if this option will work for you. In addition, you must consider the cost of a realtor's fees and closing costs. In addition, you may not be able to negotiate the closing date and therefore, have to leave your home within days.
Short Sale
This is where permission from the lender is obtained to sell the property for less value than the outstanding mortgage amount. The lender receives the proceeds of the sale, and, in exchange, release you from the remaining mortgage obligation.
Bankruptcy
Under the protection of the Federal Bankruptcy Court, Bankruptcy is a process where you can eliminate or prepay some, or all, of your debts. Bankruptcy may make it possible to stop the foreclosure of your home and allow you an opportunity.
Right of Redemption
After the Final Judgment of Foreclosure is entered by the court, you still have many of the above options as well as an additional option, Right of Redemption.
The Final Judgment of Foreclosure allows you to redeem your property from being auctioned by paying the amount due under the Final Judgment of Foreclosure. You have this option until the auction begins.
Payoff
All mortgage loans can be paid off at any time. Lenders do not care where the funds come from, as long as they are paid off. An attorney can request a payoff letter from the lender good through a specific date of the payoff so you can know how much the payoff amount is and how to make the payment. Many lenders require payoff payments to be made with certified funds and will only accept the exact amount needed to payoff the loan. Once the loan is paid off, the foreclosure case will be dismissed and a satisfaction of mortgage will be recorded in the county official records.
Short Payoff
In some situations, mortgage borrowers can request that the lender take a partial lump sum payment to pay off the entire loan balance. However, it is up to the lender to agree to this. Lenders usually require proof of the borrowers' financial information and a valuation of the property value before it makes its decision to approve the short payoff offer or not.
This is probably the first time you have faced foreclosure. Well, it is not our first time. In effect, we have helped thousands of homeowners just like you. We can help you take the emotion out of your next decision and make logical decisions, on your behalf, so your financial future has the best chance of success. Don't delay, schedule a free consultation today.
Schedule a free consultation by calling or office at 877-595-3589 or simply fill out the contact us form here and a foreclosure litigation attorney will contact you.