Last year, foreclosures dropped to a 13-year low – fantastic news for the economy and society in general.
This, however, does little to console the 624,753 families who were foreclosed on in 2018, much less any others who’ve endured this hardship in the past or those facing it now. Taking out a mortgage is a big decision that becomes one of life’s major focuses, being what figuratively holds the roof over your head, so foreclosures are emotionally devastating and financially draining ordeals. It’s common to become overwhelmed by these circumstances and feel fatalistic toward the outcome, but this is only true if you don’t take the steps required to mitigate the consequences.
But what are your options when facing foreclosure? Thompson Legal, P.A., whose attorney’s have nearly 20 years combined experience in foreclosure defense and real estate litigation, know how to navigate through these turbulent times, providing experienced guidance throughout the process. Below we’ve provided a few suggestions on how you can help stabilize your situation and take back control of your future.
Contact Your Lender. Now.
This may seem like a given, but many people stick their head in the sand when they receive a foreclosure notice or know one is coming, ignoring the coming penalties in the hopes that it will make them vanish.
This is one of the WORST possible things to do in this situation.
Reach out to your lender as soon as they send you the first notice informing you of the proceedings. Sometimes a foreclosure letter is received by surprise because of a lender’s mistake, even though you’re current on the payments. This is something that can be quickly sorted out.
But if they do intend on proceeding with the foreclosure, it’s probably time to move on to the next step.
The bank may offer you options, as it’s in everyone’s best interest for you to continue to live at home while they recoup their money – with interest – but it’s wise to find legal representation.
A firm knowledgeable and experienced with foreclosures can negotiate a fair agreement which allows you to keep your home. Everyone’s financial situation is different, which is why you must be informed of all the possible outcomes and how to reach them.
If you’re not able to afford an attorney, the government and private sector have some programs available that may be able to assist. Explore the services and resources available in your community. Nevertheless, a lawyer will give your case the attention it needs.
Loan Modifications, Repayment Plans, and Forbearances
Once you recruit an advocate skilled in the foreclosure process, they’ll run you through a few scenarios. Probably the most common are loan modification, repayment plans, and forbearances.
A loan modification makes your monthly payments more affordable, however this may add time to the length of your mortgage. Regardless, some form of repayment plan will be formulated to catch up on your debt.
If forbearance is granted, however, this is only temporary. You may not have to make any payments for a short period of time, or you possibly have them reduced, but ensure that you are making the changes you need to save your home and putting away money to pay down your debt.
Don’t be afraid to try working something out with your servicer, you’d be surprised at how far they’ll go to oblige. In housing, working out an alternative to foreclosure allows the borrower to stay in the home while the bank is still able to be paid on their mortgage. Remember, the banks are in the business of loaning money, not owning vacant homes.
Refinancing New Terms
Refinancing a new mortgage with lower interest rates means a lower monthly payment. This may be just the right thing to get you back on your feet. If your mortgage is 20 years, a 30-year mortgage might lower your payments drastically.
But contemplate the reimbursement time. Shop around for low-interest rates and closing costs. This is a way to help, but it won’t erase the reimbursement obligation.
Usually, you can only refinance if you have equity in your home. However, some Fannie Mae and Freddie Mac loans offer to refinance if your property is worth less than what you owe. To qualify for one of these, though, the last 6 months must be free of delinquency and there can’t be more than 1 within the previous year. There’s also a little more criteria, but this is what typically makes or breaks this deal.
Reinstating Your Loan
Florida’s laws allow a borrower to reinstate their loan by paying back everything owed with late fees, and also any court costs the bank may have acquired enforcing the mortgage.
Deed in Lieu of Foreclosure or Short Sale
For some, the safest route is applying for a deed in lieu of foreclosure or short sale.
In a short sale, the bank allows the homeowners to sell their home for less than the total mortgage debt. If your house is underwater, this is a good way to beat foreclosure.
A deed in lieu of foreclosure gives the property’s papers to the lender, freeing you of this burden, but you may not have anywhere to live.
Thompson Legal, P.A., is home to experienced and successful foreclosure attorneys who understand how best to represent families in financial difficulties. We will be happy to discuss your case with you and accommodate an appointment suited for your schedule. Contact us today for your free consultation or give us a call and see how we can resolve your dilemma.