This is only an option if you have enough equity in the home or cash in hand to cover your existing mortgage and all the expenses in selling a home.

Selling your home under this option will help minimize the damage to your credit, minimize or eliminate your tax liabilities and possibly eliminate a deficiency judgment.
 

This option can extend the term of the loan, add on delinquent payments to the loan principal, and/or reduce the interest rate to make the loan more manageable for the home owner.

Another option is a repayment plan that requires home owners to increase their monthly payments until the loan is current. It may be possible to refinance an adjustable rate loan with a Federal Housing Authority or conventional fixed loan. Note that lenders will not postpone a foreclosure just because a property is listed, although they may postpone if you have a reasonable offer in the works.
 

Loan borrowers sometimes have problems with their payments due to unexpected circumstances. This may cause the lender to start the foreclosure process. To avoid this situation, the lender and the borrower have the option to make an agreement called "forbearance". According to this agreement, the lender delays his right to exercise foreclosure if the borrower could catch-up his payment schedule in a certain amount of time. This time-period and the payment plan depend on the details of the agreement which are accepted by both of the parties involved.

Note that forbearance is just for "temporary" financial problems. If the borrower has more serious problems, for example if it is a variable-rate mortgage and the interest rate become high enough so that the borrower cannot afford the payments anymore, then forbearance is usually not a solution.

The advantages of this option for the homeowner are to avoid foreclosure and not go through the difficult process of the foreclosure process. It will release all or most of the liability to the homeowner and allow the bank to turn around and sell the property much sooner without the bank having to spend additional time and money going through the foreclosure process. This would be a good option to consider if you feel that there will be no benefit from you selling your home or doing a short sale.
 

You can always let your home go to foreclosure and do nothing. Sometimes the situation seems so overwhelming and this may be a good option. We don’t recommend that you do this, and would suggest that you talk to someone so you can determine if any of the options above would make more sense. You can also contact us if you feel more comfortable. It’s important that you talk to someone that you can trust, and not someone that is looking to take advantage of someone in a difficult situation. There are many real estate scams out there and you don’t want to become a victim because you didn't seek a second opinion. You may have some options that you are unaware of.

If you would like to get started or have some more questions, please give us a call or , for a FREE, no obligation consultation to know all your options before it is too late.

(619) 890-7447

The information provided is for general reference only and is not to be construed as tax or legal advice. Consult your income tax preparer and/or attorney for specific details regarding your individual situation.