Fresno Real Estate | EveryFresnoHome.com

If you are in danger of falling behind on your mortgage payments (or if you’re already delinquent) it’s important to know what your options are and what to expect ahead. Here are 10 ways to avoid foreclosure and get yourself out of your current financial mess.

1. Refinance

If you have sufficient equity in your  property and your credit is still in good standing, you may be able to refinance your mortgage. Check with a qualified mortgage professional to see if you qualify. If you don’t know a trusted mortgage expert, we recommend Kathy Tuck at iMortgage.

2. Renegotiate with the lender (Modification)

Step one is to contact your lender as soon as you know you can’t make a payment. The faster you move the more options you’ll have to fix your financial future. Fresno borrowers may have the option of renegotiating their loan with the lender. When you call, try to negotiate a plan that will enable the loan to be back in service. Lenders don’t want your home back; they want to keep their loan portfolio full of performing loans — not defaulting loans. Lenders say that the sooner they hear from a delinquent borrower in trouble, the easier it is to negotiate a solution. So dig out your mortgage statement and make a call to them RIGHT NOW!

4. Forbearance

One of the most overlooked foreclosure options a borrower has is forbearance. Forbearance is the postponement for a limited time of a portion or all of the payments on a loan in jeopardy of foreclosure. Partial or full payment waivers had their origins in the Great Depression. A lender expects that during the moratorium period the borrower can solve the problems be securing a new job, selling the property or finding some other acceptable solution.
Depending on your lender, you may be able to restructure your loan. For example, delinquent mortgage payments may be added to the backend of the borrower’s scheduled payments or the borrower could be given more time to bring the late payment current. Some mortgage companies are able to arrange a repayment plan based on your current financial situation. You may qualify for this option if you recently lost your job. Call your lender and inquire if you meet the requirements for forbearance.

5. Redemption

To redeem a loan, you must pay off the loan in full. Borrowers may accomplish this by refinancing (with a family member cosigning perhaps) or by a friend or relative bailing out the borrower in exchange for equity or some other financial arrangement. Redemption is a complicated process and we recommend that you speak with an attorney if you decide to pursue this option.

6. Servicemembers Civil Relief Act (military personnel only)

If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

7. Reinstatement

Prior to a foreclosure sale, borrowers have the right to reinstate a delinquent loan. The reinstatement option gives homeowners the opportunity to make up back payments plus any incidental charges incurred by the bank such as filing fees, trustee fees and legal expenses. Paying off the reinstatement amount will cancel the foreclosure and enable the homeowner to continue to live in the home as if no default occurred. For many delinquent borrowers, however, reinstatement is not an option because they are deep in debt and cannot make up back payments, plus other expenses. Consult with a real estate attorney or an experienced real estate broker because reinstatement laws vary from state to state.

8. Sell the Property — Short Sale

For Fresno home owners who don’t care to save their property, or who have no other choice than to let the property go, selling your home through a Short Sale may be a smart choice. If you have enough equity in the house to allow you to pay off the mortgage in full, then selling is usually your best option. This option preserves your equity and what’s left of your credit score. Selling also leaves you in a much better financial position should you want to buy another home in the future. If your home is worth less than you owe and you still want to sell it, it’s called a short sale. In a short sale, the bank agrees to forgive the mortgage debt for less than the total amount owed on the mortgage if you sell your home. The advantage to the lender is that it does not have to deal with costly foreclosure proceedings.

We’re Fresbno short sale experts. Give us a call (559.325.4043) and we’ll walk let you know whether you qualify for a short sale and you through the entire short sale process.

9. Deed in Lieu of Foreclosure

For Fresno homeowners who have no opportunity to reinstate, redeem or even sell their property and just want out of the property, a deed-in-lieu of foreclosure may be viable option. Essentially, a deed-in-lieu of foreclosure is a transfer of title from a borrower to the lender, which the lender accepts as full satisfaction of the mortgage debt. With this option, you as a borrower voluntarily “give back” your property to the mortgage company. You won’t save the house, but you do avoid the trauma of foreclosure and reduce the negative impact on your credit.

10. Bankruptcy

Filing bankruptcy is not a permanent cure for foreclosure, but it can temporarily halt the foreclosure process. Once a borrower in default files a petition for bankruptcy, foreclosure proceedings stop immediately. A homeowner, however, must hire an attorney in order to file bankruptcy, which can be expensive. Before considering this option, a homeowner should consult a real estate attorney.

Short Sale Help

Allowing the foreclosure process to proceed is generally the worst choice. By doing nothing, homeowners will lose their Fresno home and any equity they have earned. Plus they will damage their credit at the same time. Unfortunately, many homeowners chose this option, putting their heads in the sand and hoping they’ll win the lottery and avoid foreclosure. We help Fresno homeowners struggling to make payments get a fresh start. Fill out the form below if you want more information on how to avoid foreclosure.