Avoid Foreclosure

Little known secret about how to prevent foreclosure
of your home through "short-sale."

Note:  Prevent foreclosure! Help on short sale to avoid foreclosure is now available nationwide; although this was previously available only if you are located in Berks County, Chester County, Delaware County, Philadelphia, Drexel Hill, Haverford, Havertown and Upper Darby, Pennsylvania as well as Brigantine, Atlantic City, Ocean City, Camden County and Gloucester County, New Jersey. Call for information regarding availability of service in your area.

 Are you behind with your mortgage payments?

We can help... but first, let me explain that you're not alone.  Some homeowners face this problem due to death in the family with the main wage-earner passing away.  Others lose their jobs.  However, many are faced with this situation because of the type of mortgage they obtained when money was easy to get.

When money was easier to get, lenders were lax in extending credit.  Not that they extended credit to non-deserving borrowers.  However, the amount they allowed borrowers to borrow in some cases is more that what they normally would because the money supply was plentiful.  This left little room to maneuver when homeowner's financial situation changes, or when monthly payments go sky high when interest rates go up.  This is particularly true for those who obtained adjustable rate mortgages (also known as ARM), or interest-only loan.

There are several alternatives to getting out of this dilemma; but one alternative that is not right is to not do anything.  That, really, is not an alternative!  Instead of sitting tight "hoping" that things would change, you should be proactive in looking at alternative ways of getting out of this difficult situation.  You may tend to be in denial, and always hope that things will change, instead of facing reality and look for alternative means of solving the problem.  Some homeowners who are in this situation simply give up and mail their keys to the lender while some think of filing for Chapter 7 (where debtor is released from, and does not have to pay for, the debt) or Chapter 13 Bankruptcy (where you are on court monitored payment plan) protection.  While others still try to sell their home at inflated prices, hoping that they will get sufficient money to payoff all their debt.  You must discuss the pre-foreclosure alternative of "short-sale" of your home to a knowledgeable real estate agent.  Remember, not all real estate agents are knowledgeable in short-sale, and many who know about it are not comfortable handling it.  Short-sale is a specialized field.  In fact... short-sale, foreclosure, and pre-foreclosure are "dirty" words that many agents do not want to deal with.

Perhaps some of the above solution would work, but in many cases it would not.  Let's take a look at each one:

• Mailing your key to the lender and "giving up" your house is the same as getting foreclosed.  You don't want that and, believe it or not, lenders don't want that either.  Your credit report will show that you have been "Foreclosed."
• Filing for bankruptcy protection under Chapter 7 or 13 will be on your records for the many years to come, and it will affect significantly your ability to borrow, buy a home, or even rent.  Also, since the bankruptcy law change, you will need to meet certain requirements (age, income, etc.) before you can file for bankruptcy.  You may not even be eligible to file even if you want to.  Check with a bankruptcy lawyer on this, but filing for bankruptcy is the last thing you will want to do.  In the case of Chapter 13 bankruptcy, it will simply reorganize your debt, but you will still have the burden of paying off the loans over some period of time.  This will give you some temporary relief that will work if you only have a temporary problem situation as opposed to a permanent or extended one.  This, too, will be reflected on your credit report.
• Selling an overpriced home could be an issue since it takes longer to sell homes nowadays because of the weakening real estate market.  Time is against you.  Also, over pricing a home makes it difficult, if not impossible to sell your home.  In all likelihood, you will have to sell your home at distressed price to move it quickly.  Some try to be a FSBO (For Sale By Owner) in hopes that they will save commission because they need to get the maximum proceeds out of the home to payoff the loan.  However, in this market, real estate companies themselves are having difficulty selling homes when this is their expertise and full-time job.  Now, imagine trying to sell it on your own part-time.  For more information about selling your own home, go to www.showmethehome.com/fsbo.htm.

Instead, you should talk to your lender and seek forbearance by extending your loan payment, or even stopping your loan payment temporarily.  However, this is usually a "temporary fix" if all you need is some breathing room.  So, what else is there?  By the way, before talking to your lender, it might be prudent for you to look at the other alternatives first.  Your talking to the lender is a prelude to negotiating terms, and you should be prepared to have looked at all alternatives.

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