If you are behind on your mortgage and in fear of foreclosure there are great options available to homeowners today. Lenders are opening up alternatives to foreclosure to enable homeowners to stay in their home. When lenders work together with homeowners to stop foreclosure they both benefit. Two of the more popular options used today to stop foreclosures in Michigan are short sales and loan modifications.
The short sale is a solution that lenders are using to resolve the situation when a homes market value drops below the balance of the mortgage. In short sales, the homeowner sells their home for less than the mortgage amount, which results in a loss for the bank. Banks will consider a short sale if the homeowner can show financial hardship.
A short sale is preferred to a foreclosure for both the lender and homeowner. The benefit to the lender is they can limit the loss and damage to the property, and the homeowner can minimize the damage to their credit. It is important to have the lender agree in writing that the loan is paid-in-full to satisfy the loss.
For homeowners that want to stay in their home the loan modification may be the best option. Loan Modification is when a lender modifies the terms of the mortgage. The bank may lower the interest rate or lower the monthly payments or adjust other terms of the loan to help the homeowners as long as they have sufficient income to meet the monthly obligations.
The government has also introduced several programs designed to provide loan modifications to delinquent or distressed homeowners. By working together with lenders that participate in loan modifications have helped many homeowners stay in their home.
Deed in Lieu
A deed in lieu of foreclosure is where you deed your property back to the lender in exchange for the balance of the mortgage being forgiven. The lender will then sell the property to retrieve as much of the unpaid mortgage amount as they can.
With any financial transaction it is important to consult with professionals to protect your best interests and monitor the details of these transactions to insure a positive outcome with no surprises. The homeowner should consult with an attorney and secure a "full unconditional release" to protect against the lender coming back later for a deficiency judgment to collect the loss.
Most Loss Mitigation Departments will require similar documents to get the process started.
- A financial summary of your monthly income/expenses
- Three most recent bank statements
- Three most recent paycheck stubs
- The most recent state and federal tax return
- A hardship letter
With our proven solutions we are helping homeowners Avoid Foreclosure. As Certified Distressed Property Experts, our trained agents can assist you and YOUR family with the best real estate resources. For a Complimentary Home Evaluation and practical solutions on Avoiding Foreclosure for your family, contact us or call us at your convenience (810) 626-5600.