Information for Distressed Homeowners
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www.makinghomeaffordable.com
Alternatives to foreclosure
If you find yourself in tough economical times you should not feel alone.
The 1st step to gaining back control is to know your options. Below are a list of options for the distressed homeowner. Just knowing your rights & your options, can open the doors of communication between you & your lender.
Forebearance: Lenders may let you make a partial payment, or skip payments, if you have a reasonable plan to catch up (ie; an expected tax refund, bonus, or new job).
Reinstatement: Refers to making a payment that covers all your late payments, usually at the end of a forebearance period.
Repayment Plan: If you can't afford reinstatement, but can start making payments to catch up, the lender may let you pay an additional amount each month until you are caught up.
Loan Modification: Your lender may agree to amend your mortgage to help you avoid foreclosure. The options include:
Adding all the missed payments to the loan amount and increasing the monthly payment to cover the larger loan.
Giving you more years to payoff the loan, lowering the interest rate, and/or forgiving part of th loan, to lower the monthly payment.
Switching from an adjustable-rate mortgage to a fixed rate mortgage, so you aren't exposed to increases in your monthly payment.
Escrowing your taxes & insurance to avoid big bills in addition to your mortgage.
Deed in Lieu of Foreclosure: Process in which the borrower agrees to turn over the property in exchange for debt foregiveness. As with foreclosure, this plan does have a negative impact on their credit, however not as much as an actual foreclosure.
Cash for Keys: Usually will only work if the home has enought equity and the lender & the borrower agree to exchange cash from the lender for the keys to the property.
Shortsale: Selling the property for less than what is owed. This option requires bank approval & hardship such as job loss, business failure, Illness / medical costs, divorce, natural disaster. Banks will also require full financial disclosure. A shortsale may also have tax liabilities.
Always speak to a tax consultant when considering this option. Promissory notes may also be a part of this option. The benefits to a shortsale is that the bank will not have to go through the expense of foreclosure, the home continues to be under the care of the homeowner (not abbandoned) and homeowners who choose this option may be able to qualify for another homeloan within 1-2 years rather than the usual 7 year penalty of a foreclosure.
Typical Shortsale Bank Package MUST Include:
- Proposal letter from your REALTOR
- Shortsale Bank Application
- Hardship Letter
- Full Financial Disclosure/ assets & liabilities
- Supporting Financial Information 2-3 months
- Supporting Hardship Information
- Estimate of repairs
- CMA With supporting sales data
- Copy of listing agreement
- Marketing history & feedback
- Residential contract of sale (signed by buyer & seller)
- Pre-qual letter for buyer
- Copy of deposit & escrow
- Preliminary HUD 1 settlement statement
The Beach Group is certified to assist distressed sellers with selling their properties short of what is owed to the bank (Shortsale). They can walk you thru the qualifying process, marketing of the home & negotiating the terms of the shortsale with the bank repesentative so that you can move on with the rest of your life. Call for a FREE, CONFIDENTIAL, consultation.
HUD Approved Housing Counseling Agencies:
(Serving the Eastern Shore)
CCCS OF MARYLAND AND DELAWARE
Phone: 800-640-2227
Toll-free: 800-640-2227
Fax: 410-869-8828
Email:housing@cccsinc.org
Website: www.cccs-inc.org
SALISBURY NEIGHBORHOOD HOUSING SERVICE, INC
Phone: 410-543-4626-201
Fax: 410-543-9204
Email:cherylm@salisburynhs.org
Website: www.salisburynhs.org
SHORE UP!, INC
Phone: 410-749-1142
Fax: 410-742-9191
E-mail: tchase@shoreup.org
Website: www.shoreup.org
TELAMON CORPORATION
Phone: 410-546-4604
Fax: 410-546-0566
917 Mt. Hermon Road, Suite
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