Facing foreclosure? Whether you’ve been sitting on the fence, hoping it will all go away, or actually trying to sell your property with little luck, there still may be some options for you.
Reinstatement of the Loan
With this option, a homeowner would pay back all fees owed to the lender. This would include all principal payments, late fees, attorney fees, and foreclosure fees. The loan would be “cured”.
Repayment Plan
A repayment plan is a written agreement between lender and homeowner, and would typically include regular monthly payments higher than the standard mortgage amount in order to repay the amount in default.
Loan Modification
In some cases, a lender may choose to modify an existing mortgage. Modifications can be a reduction in interest rate, change in a mortgage product (from an adjustable rate to a fixed rate for example), or extend the life of the loan.
Cash Sale
This works when the homeowner has equity built up in a property, and can lower the price for a quick sale. Once the home is sold, cash is used to pay off the lender plus all fees, with any remaining cash going to the homeowner.
Short Sale
If the borrower owes more than the property is worth, the lender may consider a short sale. This will result in no payment to the homeowner, but will not leave a foreclosure mark on his credit rating either.
Do Nothing
The foreclosure process will continue on schedule, but this can give a homeowner several months of rent-free living to save up funds before moving on to another living arrangement. This is the worst and most unfavorable choice, as it will ruin credit ratings and potential for future purchases.
