THERE ARE DIGNIFIED SOLUTIONS TO FORECLOSURE 

       A lot of today’s struggling homeowners made all the right moves. They took a reasonable loan for an affordable mortgage, and we’re then hit by the unexpected: their employer cut benefits or laid them off due to the constricting economy; a surprise expense changed their budget plans; their financial investments took a turn for the worse; the list goes on.

      This kind of owner situations aren’t usually the kind you hear about, but they are everywhere. That’s why I am sharing the news with you about options that are available to distressed homeowners. With the new Home Affordable Foreclosure Alternatives Program, or HAFA, you may be eligible for a 3,000 incentive to avoid foreclosure by pursuing a short sale or deed-in-lieu.

       The first part of assessing someone’s current mortgage situation involves seeing whether they can modify their loan and lower payments to an affordable level. This route does work for some, but an important thing to understand is that mortgage modifications almost never lower the principle amount owed on the loan, only the interest.

       This means that a mortgage modification will only help those homeowners who are just out of reach of making their payments, which is unfortunately not the case for most distressed homeowners. With financial hardship as impactful as a job loss or major drop in salary or financial assets, tweaking the interest rate on your loan is usually not enough to make the mortgage affordable.

       If I find that you are in a situation that would benefit from a mortgage modification, I can show you the best way to pursue this route. If not, then a short sale may be your best option, and HAFA makes that option even more appealing.

      In addition to offering the 3,000 incentive for a successful short sale, HAFA holds the lender to a set timeline so that the transaction does not drag out unnecessarily. This lessons the chance of being foreclosed upon in the middle of the short sale process.

     A select few lenders and mortgage servicers may not participate in the HAFA program. But despite this, a lender almost always looses more money in a foreclosure than in a short sale or deed-in-lieu. If a lender is convinced that a homeowner has no way of paying the current mortgage, they will be concerned with salvaging as much of their investment as possible, so short sales are generally the best option for them as well.

     If your lenders participating in HAFA, there is a set of criteria you must meet to be eligible for the program. To find out your eligibility and lender’s participation, please contact me at 773-573-9798 or email alrod.realtor@gmail.com