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The Most Common Foreclosure Choices

Following are the most common choices for people facing foreclosure. Depending on your situation, all of these options may well, or may not, be available to you. Everyone's individual situation is different.

1. Reinstate the Loan.
2. Forbearance
3. Mortgage refinancing
4. Loan Modification
5. Sale of the Property
6. Bankruptcy Filing
7. Deed in Lieu of Foreclosures
8. Nothing

1. Reinstate the Loan. The most obvious option would be to pay the loan current. If foreclosure proceedings have recently been filed, then the amount needed to get loan current will not simply include back payments, but also late charges and also possible attorney fees. This is the quickest and also the most efficient way of closing a foreclosure action. Negotiate with the lender when you can do this. Sometimes they will take a little smaller amount, 90%, 80%, even as low as 75%. Call them and say something similar to, I've borrowed X amount of dollars from my relatives, will you take that and forgive the rest? Don't tell them it can be your money. Make it is always someone else's money. They are going to be less sensitive to you if you have lots of money and have not been making payments. Get the discount in writing before you send the money, an email or fax will do.

2. Forbearance The lender stops or postpones lawful action. Usually granted when you make satisfactory arrangements to bring the overdue mortgage payments existing.

3. Mortgage refinancing Mortgage refinancing seeks to avoid foreclosure when you go to a new lender and obtaining a new loan. But in most cases, once foreclosure has started, you have been through several months of late payments or absolutely no payments. These late payments have a devastating impact on your credit rating. In addition, the new mortgage company will easily find out about the current foreclosure action. This most often leads to denial from the refinance loan application. If you are approved you can bet it will have a VERY high interest rate with more than normal closing costs etc.

This option is normally just for those with excellent credit histories and that have only suffered a temporary problem. Remember that time is of the essence, so don't waste a lots of valuable time on this choice. You could lose your house while waiting on loan acceptance.

4. Loan Modification A loan modification seeks to avoid foreclosure by negotiating with the financial institution to modify the terms from the loan. Loan modifications may include adjusting he interest rate, extending the loan period or even adding the delinquent portion and fees back onto the principal of the loan to be repaid with time.

5. Sale of the Property If you have been unable to work your lender or find another suitable solution in a timely manner, it is time you should think about selling.

Selling it through the traditional method, of listing it with a realtor on the MLS listing will be one solution. But this method can take from 4-6 months. Make sure you get a genuine realtor. One who will work to market the your home and list it at a price it will sell for. Some realtor's over exaggerate the actual house's value and the selling price to find the listing and then the house doesn't sell and you are foreclosed on, losing everything. Do a short contract. One month at a moment. Tell the realtor you will renew it each month if they are good and are working hard to sell the home. If they are not willing to offer you a monthly contract or a contract that allows you to cancel any time, then find another realtor. Time is of the essence and of course, if the realtor is not willing to become a help in your situation, find a realtor who will be.

Another avenue to consider is selling your home to an investor who provides "a quick closing". Remember time is of the essence. Typically, this will be for under fair market value, but can be a benefit to you because it's a quick "as is" sale without real estate commissions. "As is" means you wouldn't normally have to spend any cash doing repairs, or spending time putting the home in perfect condition. By selling your house "as is" to a investor, you get a quick sale, enabling you to instantly stop the foreclosure and also salvage your credit. In the Kansas City metro area BLu Horizons Real Estate Solutions provides a quick closing, as is sale. We can close in 7 days or less, if we have to.

6. Bankruptcy Filing Some homeowners act on their own lawyer's advice and file bankruptcy convinced that all their problems are today solved. Bankruptcy does put a stop on everything. But all it buys you is some time. The end result is, almost always the property still goes to auction and you now possess a bankruptcy, in addition to the foreclosure on your own credit report.

7. Deed in Lieu of Foreclosures This is when you can voluntary deed title for your property to the lender. You are basically giving the home back to the bank. The ordinary effect of the taking of the Deed in Lieu, is to extinguish the lender's deed of trust plus it vests the lender with title at the mercy of all other existing liens as well as encumbrances. In effect, the lender becomes the brand new owner. The lender is not necessary forced to accept the Deed in Lieu and may show their refusal by processing a Notice of Non Acceptance with the County Recorder.

8. Nothing You may find this odd that nothing is listed as an option; however one of the most frequent options taken by homeowners is actually Nothing. Don't fall into the trap of thinking that everything will magically work itself out, because it will not.

We trust that the overview of foreclosure options will allow you to start down the path of informed decision making to guard yourself, your family, your home and your banking account.

Although the most common options are covered on this report, there may be other options accessible to you, depending on your particular circumstance.

This is not legal advice or assistance! The application of law varies from state to state and an individual's specific circumstances can vary greatly. Consult a lawyer if you need and you want professional advice.

This information was provided by BLu Horizons Real Estate Solutions at blu-res.com