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reinstate
The homeowner makes all missed payments, late fees, legal fees, and the loan is reinstated. The owner requests the amount from his lender in the form of a reinstatement letter.
forebearance
The lender allows the owner to make up missed payments and fees over time, or may even place the amounts on the end of the loan amortization. Sometimes an option if the reason for missed payments is temporary.
sell the property
If an owner has equity in the property, he or she can sell it and cure the foreclosure.
refinance
An owner with good credit and income may be able to refinance.
loan modification
If an owner can afford payments close to those he or she defaulted on, the lender may alter the loan repayment terms to make them lower.
loan workout
In some cases, lenders may even reduce the loan principal amount.
deed-in-lieu
The homeowner tenders his or her deed to the bank to avoid the foreclosure process. Warning: Note that Deficiency judgments are covered by foreclosure statutes, which do not cover the Deed-in-Lieu Foreclosure process.
civil relief act (scra)
Provides certain protections to military personnel who are in foreclosure.
deficiency judgments
If the proceeds of a public sale yield less to the foreclosing lender than the amount of the loan balance, the difference is called a Deficiency. While many Deficiencies are not collectible, some are, and extreme care is critical.
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ScamsSun July 19, 2009, 12:59 pmby Bill MetzkerThe first scam to watch out for is someone asking you upfront for money in return for getting you a loan modification. Don't do it. Call your lender and do it yourself. When that fails, get someone who does it for a living.
But there are lots of scams out there where firms and/or persons take advantage of people in financial distress. One is the "trust model" for foreclosure avoidance. Sounds good, because it uses the term "trust."
What happens is that an investor comes along and suggests the distressed property owner put the home in a trust with the investor being appointed trustee, with the right to sell the property. The trustee then will try to convince the lenders to allow a low ball short sale, while at the same time, the trustee markets the property for sale at a higher price, hoping to pocket the difference.
There are variations. The investor may offer, say, $10 for an option to buy the property and negotiate a short sale, while still marketing the property at a higher price, with the concurrence of the owner. Sometimes, the investor even gets the owner to deed the property over to the investor.
Lots of problems, here. First, the investor has no incentive to seek debt forgiveness for the distressed owner. Short sales result in deficiencie snot covered in the fireclosure statute. The seller/owner could be forced into bankruptcy.
Second, if the property doesn't sell, the investor can just walk away and leave the seller/owner worse off that he/she was before, since the property will no be closer to public sale. Third, the title to the property may be clouded, which might impede the seller/owner's ability to sell the property when the investor walks.
Programs that look too good to be true generally are. Getting mortgage relief is a hard process, and anyone telling you it's easy is just plain wrong. View Archives
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