Alternatives to Foreclosure
We understand that you have a lot of questions and may be unsure of who to trust. As a nonprofit organization, it is our job is to provide you with honest, unbiased information. Our counselors are industry experts and can provide you the guidance and assistance you are looking for in order to avoid foreclosure. The information required to evaluate your situation is universal throughout the industry. By following the provided instructions you will be better prepared to find the answers you need.
Step 1) Initial Evaluation – A glimpse of your situation. We will be able to answer the majority of your question based on your answers. Get Started – Initial Evaluation Intake Form
Step 2) Full Intake Package– Getting you qualified. A full evaluation based on your detailed financial situation. We will contact your lender and evaluate your situation based on your hardship, financial information, and your servicer or lender’s guidelines all at no cost or obligation!
Get Started – Detail Intake Form
What are your options if you have been denied a modification.
What is a Deed-in-Lieu?
A deed-in-lieu (DIL) of foreclosure is a foreclosure prevention option in which a homeowner gives the deed back to the bank voluntarily prior to foreclosure. read more on Deed-in-Lieu
Deed-for-Lease (D4L) Program
Fannie Mae qualified borrowers are given the opportunity to remain in their homes as tenants in exchange for completing a Deed-In-Lieu property transfer with their lender.
Home Affordable Foreclosure Alternatives (HAFA)
Many homeowners may feel that they can no longer afford their home, but want to avoid the negative effects of foreclosure. The Home Affordable Foreclosure Alternatives (HAFA) Program offers homeowners, their mortgage servicers, and investors an incentive for completing a short sale or deed-in-lieu of foreclosure. With these options, under HAFA, a homeowner leaves their home to transition to more affordable housing and alleviate the mortgage debt they owe. The HAFA Program streamlines both of these options to make them easier for a homeowner to work with their servicer. Under the program, a homeowner can receive $3,000 to help with relocation costs. Get Started – Initial Evaluation Intake Form
What is a Short Sale?
A real estate short sale is a consent from their bank allowing them to sell their property at an amount less than that due on their mortgage loan. It offers an optimal alternative to foreclosure, saving the banks the expense and hassle of the foreclosure proceedings and relieves the homeowner of responsibility over the property with less credit damage than foreclosure.
What are the advantages of a short sale vs. foreclosure?
The main advantage of a real estate short sale is preventing foreclosure. Short sales are less damaging on credit ratings than foreclosures. Remaining on your report for up to 7 to 10 years, a foreclosure is often times deemed as damaging as bankruptcy, and may cause you to wait up to 3 years to re-qualify for a home loan at a sensible rate. Short sales may report on your credit for up to 3 to 5 years however, are noted as “paid in full” with a “settled for less than owed” and are spared the more harmful FORECLOSURE marks.
However, because a short sale allows the homeowner to sell their property for less than the outstanding mortgage debt, it may cause a “deficiency”, written off as a forgiveness of debt by the lender. In some instances, that deficiency can be considered taxable income that the seller may be taxed on. We highly recommend to seek the advice of an attorney or your CPA and not rely on this information to make final decisions.
Can Bankruptcy Stop Foreclosure?
There are two main types of bankruptcy, Chapter 7 and Chapter 13. The Chapter 13 bankruptcy was originally created to stop foreclosure. In the event the date of the bankruptcy case is filed before the date of the foreclosure, the bankruptcy will prevent the foreclosure sale from taking place. A Chapter 13 bankruptcy will establish a reasonable amount of time to resume making monthly payments and bring the loan to a current standing. This will allow you to save your home and continuing living there.
A Chapter 13 reconfigures your debts based on your take-home income, with an allowance for living expenses. As such, the payments will be reduced to a manageable amount you can afford. If your credit rating is already bad and only risks getting worse, filing bankruptcy will not do anymore harm. Eventually, it will help your credit score improve, because it will clear or reduce your debt, making it possible for you to handle more at a later date.
Disclosures
The information contained herein is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, We highly recommend seeking the advice of an attorney and not rely on this information to make final decisions. We are a nonprofit housing counseling agency, therefore, we are not qualified to provide legal and/or tax advice. We are not licensed as a lawyer nor a CPA and cannot advise concerning IRS consequences. While RESCUE strives to keep the information on the web site accurate, complete, and up-to-date, RESCUE cannot guarantee, and will not be responsible for any damage or loss related to, the accuracy, completeness, or timeliness of the information provided. Opinions expressed herein are solely those of the contributors or authors and do not represent an endorsement or corporate position of RESCUE unless otherwise noted.
