If you have defaulted on your mortgage payments and actual foreclosure has not happened yet, a number of alternatives to prevent foreclosure are available for you. You can either retain or lose your home. Discuss your situation with a Long Island foreclosure attorney to know what foreclosure prevention options could be best for you.
If you have missed paying your mortgage because of a temporary hardship, you can negotiate with the mortgage company to let you repay back payments over a time period. You should be able to provide a Financial Statement to your lender, which shows that you are capable of making back payments.
Special Forbearance Plan
In a mortgage process context, forbearance is an agreement between a borrower and lender to delay a foreclosure. Based on your financial situation, you may qualify for special forbearance plan if you have experienced an increase in everyday life expenses and a salary reduction. Information should be furnished to your lender, showing that you are capable of meeting the requirements of the plan that may be arranged for you.
Many borrowers are considering mortgage refinance for several reasons such as getting a lower monthly mortgage payment, preventing balloon payments and obtaining a cash out from a part of the home’s equity. Refinancing in foreclosure is different from normal refinancing. Basically, when you apply for a conventional or regular mortgage refinance, your lender will look at your mortgage payment history. You may qualify for a refinance if your loan is not more than ninety (90) days delinquent.
You may work with your lender to come up with a written agreement to change some of the terms of your mortgage loan. Typically, mortgage loan modifications involve one or more of the following:
- Extension of the loan term;
- Modification of the principal balance;
- Change in loan type;
- Reduction of late payment penalties;
- Reduction in the loan’s interest rate.
However, many borrowers are having difficulties in applying for a mortgage modification. If you have no idea on how to deal with your lender, contact a Long Island foreclosure attorney. Your lawyer will help you understand the entire mortgage modification process and will present your application in the format desired by your lender to guarantee a fast process.
Selling your property could be the best solution to avoid foreclosure if you think meeting repayments can be an enduring problem. With this option, you can sell your house for a value that is less than what you need to pay off your loan. You may qualify to initiate a pre-foreclosure sale if you meet the following conditions:
Your loan is at least two (2) months delinquent;
You are capable of selling your house within three (3) to five (5) months.
As possible, sell your property with the guidance of a Long Island foreclosure attorney. Beware of buyers who are taking advantage of a homeowner’s financial difficulty. Check with your lawyer before you engaged in any deal that involves your property.
Deed-In-Lieu of Foreclosure
If you want to prevent foreclosure, you may consider deed-in-lieu of foreclosure as a last resort. Many homeowners are using this mechanism to save time and money that could be wasted if a formal foreclosure process will be undertaken. A deed-in-lieu is something like voluntarily giving back your home to the lender without harming your credit rating.
Consulting a Long Island foreclosure attorney may be helpful if you want a deed-in-lieu but you are confused with the application process. Prior to signing any contract or agreement, it would be best to ask an attorney to review the documents so you know what legal rights you are giving your lender following the completion of the deed transaction