rescue scam

Foreclosure Prevention Tactics

If you are in a position that you may loose your home to foreclosure, it is in your best interest to take action immediately.   The sooner you act the better; it makes the problem worse to ‘stick your head in the sand’ and ignore it.  Below are a few options that you might consider:

1. Refinance
   1. HOPE for Homeowners (H4H) program available through the US Department of HUD
2. Loan Workout – Consult an attorney throughout this process
   1. Talk with your lender about loan modification options
      1. Forbearance – making a partial or skipped payment with a plan to catch up
      2. Reinstatement – catching up on your late payments
      3. Repayment plan – make payments to catch
      4. Loan Modification – lender agrees to modify your loan to keep you from going into foreclosure
      5. Deed in Lieu of Foreclosure – signing property over to bank in exchange for debt forgiveness – hurts your credit but not as much as a foreclosure
3. Sell property for less than is owed and bring the shortage to closing
4. Short Sale
   1. Sell your home for less the you need to payoff all of the liens and cost of selling.
   2. The lienholder(s) must agree to accept less than is owed .
   3. Seller may be required to ay back the shortage over time or bring some funds to closing.
   4. Must qualify for a short sale
      1. Hardship or “changed financial circumstances”
      2. Property worth less than owed
      3. More paperwork required than when getting the loan
   5. Although it affects the seller’s credit it has less impact than having a foreclosure on your record
5. Foreclosure – Contact an attorney

If your are in a hardship situation it is important that you contact your lender’s “loss mitigation department” IMMEDIATELY.  I advise seeking legal council from a reputable attorney.  DO NOT wait!

Be cautious about those who offer to take care of your problem (Rescue Scams).  Many people have lost even more money by trusting these people/companies and still lost their home.  Some of the warning signs that it is a rescue scam incude:

• Ask you to sign a quitclaim deed for the property
  • You are still liable for the mortgage payments – don’t depend on someone else to make them for you
  • Youmay be offered to lease the property from the scammer

Consult a real estate agent who has earn a Short Sale & Foreclosure Resource Certification to help guide you through the maze of selling your home on a short sale and to determine if that is the route that is best for you.