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Leave your home, avoid foreclosure!

Published On: September 2, 2010



Today we will again be a discussion of the options you have if you are struggling with your mortgage payments and want to avoid foreclosure.  However, today's options are not things you can do to keep your home, today's are things you can do to avoid foreclosure and leave your home.  Remember the entire goal here is to avoid foreclosure and we cannot stress that enough.  There are only two options we're going to present to leave your home and let's go ahead and get started with them.

First, you may very well qualify for a Short Sale and what happens with a short sale is that you end up selling your home for less than the balance remaining on your mortgage.  If your mortgage company agrees to the short sale then once your home is sold you would pay off the entirety (or a portion of) the balance remaining on your mortgage.  The short sale option becomes relevant when you are unable to refinance or modify your mortgage, you're facing a long term hardship, you are behind on your payments, owe more than the home is worth or have not been able to sell your home for the price that would cover what you still owe on your mortgage.  Also some of the benefits of doing a short sale as opposed to letting your home go into foreclosure are that you eliminate or reduce your mortgage debt, you avoid the negative impact that foreclosure has on your credit score, you can start repairing your credit sooner than if you went into foreclosure and you may be able to get a Fannie Mae mortgage to purchase a home sooner than if you would have foreclosed.

The second option we would like to present to you is called Deed-in-Lieu and once again while not ideal it is preferable to foreclosure.  The Deed-in-Lieu is where the homeowner voluntarily transfers the ownership of the property to the owner of the mortgage in exchange for a release from your mortgage loan and payments.  This option is beneficial in that you eliminate or reduce your mortgage debt, avoid the negative impact of foreclosure, you may be eligible for relocation assistance, start repairing your credit sooner and if your loan is owned by Fannie Mae you may qualify for the Deed-For-Lease in which Fannie Mae would lease your home back to you instead of making you leave it.  Once you've qualified for the Deed-In-Lieu you are required to vacate the property and may be required to sign standard pre-closing documents as well as attend the closing.  Also, you will be required to leave the interior as well as the exterior of the home in good condition meaning debris, trash, personal belongings and damage must be removed from the property.

That will wrap up today's discussion of avoiding foreclosure.  Remember whether your looking to buy or sell we have an agent for you so give us a call!


Century 21 McDaniel & Associates