Avoiding Foreclosure

If you are one of the many homeowners that find themselves owning more than their home is worth, you have options! Don't walk away or let your lender take the home!
Even if you have fallen behind on your mortgage payments, there is still time to avoid foreclosure! I have a free Foreclosure Avoidance Packet that explains your options. I will be happy to deliver it to you free of charge with no obligation. Just give me a call at (805) 390-0418 or email me at dan@allredrealty.net for your free copy.
The worst thing you can do is - Nothing! Over 55% of homeowners that lose their home to foreclosure do so because they did nothing to avoid it! They just assumed, wrongly, they had no options and the bank would take their home if they missed payments. Don't let that happen to you.
Call me today. The call is free and so is the information.

Many lenders would rather not foreclose. They take a large financial hit on a foreclosure. So in many cases, they'll consider viable alternatives. Some of these alternatives may keep you in your home.
Loan Modification: 

While only certain homeowners will be able to take advantage of this alternative, it may be your best option because it keeps you in your home and typically results in the least damage to your credit.

Your lender may be willing to modify the terms of the loan, whether it's reducing the principal, lowering the interest rate or other creative strategies to make the loan affordable for you. As part of the stimulus package, the U.S. government has programs to provide incentives for banks that use this strategy as an alternative to foreclosure.

Mortgage and foreclosure terms defined:
Short Sales:
This is the fastest-growing foreclosure alternative. Many lenders will allow a Short Sale, when the home sells for less than the amount of the loan. This is attractive for lenders because they lose less money than in a foreclosure. Also, Short Sales generally take less time than foreclosures, so the banks don't have to carry the properties on their books as liabilities.

And it's attractive for homeowners because the impact on their credit is far less than in a foreclosure. You may be able to buy another home in as little as two to three years after a Short Sale, compared with a typical seven-year wait after a foreclosure.

Short Sales are paperwork-intensive, and there are many, many details involved. If you're considering this option, it's critical to work with a trained real estate agent who knows all the steps required to successfully complete a Short Sale.

At Allred Realty we understand the intricacies of these transactions, and they'll be able to advise and counsel you every step of the way.

The U.S. Treasury has announced guidelines for streamlining and simplifying the Short Sale Process. Read more about the plan.

Keep in mind that no matter which option you choose, there may be tax and other financial consequences. You should consult with a tax adviser or legal expert.
Foreclosure (Cash for Keys)One of the biggest problems in foreclosures is that homeowners sometimes physically damage the property, or even sell some of the fixtures, before leaving. Needless to say, this is not a good idea. It may expose the homeowners to financial and legal liability. It also makes the properties much more difficult to sell.

To prevent this, some lenders offer a program called "Cash for Keys." The homeowners receive a check for vacating the property within a certain time period and leaving it in good condition. If you have no alternative other than foreclosure, you should ask the bank about this option.

Tips From U.S. Department of Housing and Urban Development has 10 tips for avoiding foreclosure:

  1. Don't ignore the problem.
  2. Contact your lender as soon as you realize you have a problem.
  3. Open and respond to all mail from your lender.
  4. Know your mortgage rights.
  5. Understand foreclosure prevention options.
  6. Contact a HUD-approved housing counselor.
  7. Prioritize your spending.
  8. Use your assets.
  9. Avoid foreclosure prevention companies.
  10. Don't lose your house to foreclosure recovery scams.