Mortgage Relief

Several foreclosure alternatives exist for a homeowner who is experiencing a financial hardship.  There are pros and cons to each so it’s critically important to have an experienced loss mitigation professional or an attorney with experience in real estate law consult on the best course of action.

Loan Modification

A Loan Modification is a written agreement between the homeowner and their mortgage company that permanently changes one or more of the original terms of the note to make the payments more affordable. Loan modifications can include one or more of the following terms:

Forensic Loan Audit
Many loans funded during the "boom" years of 2002-2006 were performed with legal violations. Although only a fraction of the loans were funded with blatant disregard for the law, the majority of loans have significant State and Federal violations resulting from carelessness, greed or just innocent oversight by the lender and/or broker. The audit is an extensive and thorough examination of loan documents that borrowers signed when they secured a mortgage loan.  If there are "predatory lending" violations, attorneys may employ the violations as leverage with a lender to expedite a loan modification or short sale.

Short Sale
A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. Learn more about Short Sales.

Deed-in-Lieu
A Deed-in-Lieu allows homeowner to transfer your property voluntarily to their lender and their debt or deficiency is often forgiven.  The borrower is immediately released from most or all of the personal indebtedness associated with the loan.  The borrower avoids the notoriety of a public foreclosure and may receive better terms than a formal foreclosure.   AKA "Friendly Foreclosure."  Caveat Emptor: if Junior Liens are not resolved properly under DIL procedure, there will be a "cloud on title".

Bankruptcy
Bankruptcy to stop foreclosure is possibly the least-understood and least-desired option for most homeowners, although it can provide them with the last chance they need to be able to save their homes. In foreclosure situations, filing bankruptcy will put the entire foreclosure process on hold, which is very important for homeowners when the situation is getting out of control and they are running out of options at the last minute. When a foreclosure auction is approaching, and there is no other way to stop the Trustee Sale, filing bankruptcy will immediately put everything on hold, including putting off the sale of the property.  But it's only a temporary "pre-foreclosure" strategy at best.