Are You Facing Foreclosure? We can help.

Most Common causes of foreclosure:

• Adjustable Rate Mortgage Reset – Payment shock
• Negative Equity, Property Upside down, cannot refinance, owe more than the property is worth
• Illness & medical expenditures
• Job Loss
• Reduced Income
• Failed Business
• Job Relocation
• Death of Spouse or co-Borrower
• Death
• Incarceration
• Divorce or Marital Separation
• Military duty
• Damage to Property *natural disaster or unnatural)

If you are behind on payments and/or facing foreclosure, we can help, whether you want to buy time to sell your home quickly or keep your home.

If you have received a notice of default from the mortgage lender, what are your choices?

1. Sell the property. If you can find a buyer before the house goes to auction, you can sell it and keep whatever equity still exists. However, in a slowing market with homes on the market for over 200 days this might not work and you could still lose the house.

2. Work out a deal – The lender may be willing to work with you if you talk to them early enough and you have enough equity

3. Refinance with a Subprime lender – Your credit is damaged because of the mortgage delinquencies, so most traditional banks will not work with you. If there is equity in the property, you may be able to find a lender who will refinance you – at a higher than normal interest rate – these are called subprime loans. About 20 percent of mortgages today are subprime.

4. File Chapter 7 bankruptcy If you can’t get caught up in time, you will not be able to keep the house — but you’ll generally be able to delay the foreclosure sale a month. Any remaining debt to the lender will be wiped out.

5. File Chapter 13 bankruptcy – If you can afford to make the future mortgage payments and the delinquent payments, too, file for a Chapter 13 bankruptcy. This is different than Chapter 7, in which assets are liquidated but debts are wiped clean. With Chapter 13, you keep your assets and, under court supervision, you repay your debts under a three-to-five-year plan.

6. Short Sale / deed in lieu of foreclosure – A short sale takes place when the bank allows you to sell your property even though their mortgage won’t be paid. Be careful — the bank may allow the sale to go through, but only on the condition that you repay the deficiency. In a deed in lieu of foreclosure, the property is signed over to the bank in exchange for the bank giving up its rights against you. When might a bank agree to either of these? Lenders spend close to or more than $30,000 to foreclose on a property. Most lenders will consider these options to avoid foreclosure costs.

7. Walk away from the house - Pack your things and leave. The only issue remaining is whether your lender can sue you for any deficiency still owed after the sale, and that depends on the state you live in and the type of mortgage you have. You’d be wise to speak to an attorney before taking this step. Any sale or transfer of property has tax consequences, including a foreclosure sale or a deed in lieu of foreclosure. Seeing an accountant is probably a good idea, as well.

Here are two options NOT to consider. In other words, they’re scams.

2 “don’ts” when foreclosure looms:

1. Never sign over your property title to another company: Some companies say that after the mortgage is current they will re-sign the property back over to you. This rarely happens. Instead, the company is likely to pull out equity, not make any mortgage payments and allow the property to be foreclosed. You will not be able to save the property from future foreclosures because the property is no longer in your name.

2. Never take out a High-interest second mortgage: When a property has equity, there are companies that will give you a second mortgage, in an amount as high as 70 percent of the equity available. The interest rate could be as high as 18 percent and the fees can be exorbitant. They are hoping that you’ll blow the money and default — which allows them to take the property from you.

* excerpt: Bankrate.com

Our associates working on behalf of a Non-Profit Organization have helped many families by providing free, caring and comprehensive education and counseling services, advocating on your behalf with your mortgage lender or servicer, and negotiating a long-term affordable solution so you can save your home or buy time if you no longer wish to remain in your home.

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