It can be difficult to think of foreclosure as a reality. When the economy is going through tough times, we feel it, and it can spell disaster and heart break for families that are threatened with foreclosure. However, there are several alternatives to foreclosure that you may want to look into. Here are a few to explore if you find yourself in this situation.
The first is Loan Modification. This is for homeowners who can pay a portion of their loan amount but not the whole thing. In this situation, the individual and the bank agree on a lowered monthly payment that the homeowner will pay in monthly installments. It sounds easy, but it can be a lengthy process, and even though the bank will let the homeowner pay reduced amounts each month, the interest rates may be higher or the length of the loan may be lengthened to make up for the altered plan.
The second is a short sale. This is a situation where the homeowner sells their property for less than the debt they owe on the property and the bank “forgives” the rest of their debt on the property. To prove that you are eligible for a short sale, you will need to prove that you are in severe financial hardship, you don’t have enough money to cover the remainder of your debt, and your home is worth less than the amount you owe to the bank.
The last is a forbearance. This is an alternative to a foreclosure where the bank allows the borrower to pay a lower amount than what they owe for a certain period of time. The conditions are such that you are experiencing a temporary financial hardship and you have not missed any previous mortgage payments.
These are just a few alternatives to consider if you are facing foreclosure. Stephen K. Hachey is a Florida real estate attorney who can help you make the choice that right for you and your family. Contact him at 813-549-0096.