Foreclosure Help and PreventionAre you having trouble making mortgage payments? Have you fallen behind on your house payment?Do you worry about losing your home to foreclosure?Does someone you
Foreclosure Help and Prevention
Dated: March 12 2022
Foreclosure Help and Prevention
Are you having trouble making mortgage payments?
Have you fallen behind on your house payment?
Do you worry about losing your home to foreclosure?
Does someone you know suffer from any of these problems?
Know Your Options.
Life is full of changes. Change can bring prosperity, happiness, accomplishment, and fulfillment. Change can also bring stress, fatigue, unemployment, and uncertainty.
If you find yourself in financial hardship and are worried about making your next house payment, then the following information will help.
Call 908-494-4611 Douglas Ramos and Doug will help explain any of the options described below.
Falling behind on your mortgage is daunting, but it’s important for you to know your options to avoid foreclosure. Unforeseen circumstances can overwhelm even the most well-intentioned homeowner. Planning now to take charge of your finances will give your much-needed peace of mind.
If you are struggling financially, you’re not alone. Many homeowners find themselves in the undesirable position of falling behind on their bills. The reasons are as varied as the homeowners, but can include:
· Unexpected Unemployment
· Sudden Illness
· Major Home maintenance/Repairs
· Inability to Pay Adjustable Interest Rate
· Excessive Debt
Any of these things can happen to any of us at any time. While it may be embarrassing, acting now will serve you well if you want to keep your home. Know the available options to avoid foreclosure. Stop worrying today. You’re not alone and there is help out there for you.
Contact your lender: Many people live by the belief that “if you ignore it, it will go away.” This philosophy doesn’t work very well in life, but it absolutely doesn’t work when you get behind on mortgage payments.
Forbearance: If you have lost your job due to the pandemic, or if you can prove that the pandemic has caused a decrease in your income, you may be eligible for Mortgage Forbearance. Depending on the bank or servicer of your loan, forbearance allows you to stop making payments for a certain period of time. This time period is commonly six months, but it can be longer and there can be extensions. The money that you owe is not forgiven, but instead, is added to the principal of the loan. In some cases the borrower has to make payments on the arrears as soon as the loan comes out of forbearance. This is something that must be agreed upon before entering into an agreement.
Loan Modification: A Loan modification is a change made to the terms of an existing loan by the lender. It may involve a reduction in the interest rate, an extension of the length of time for repayment, a different type of loan, or sometimes a reduction in the principal balance. It could also be a combination of any of these things. There are several different types of Loan Modification programs. All of them require some type of financial hardship. Depending on the lender, you may be able to apply directly with little or no assistance. It is highly recommended that you seek out professional help from an experienced real estate broker, third-party company, or an attorney. Any of these options are great if you find someone that has real-life experience in dealing with lenders. Many Realtors, attorneys, and other third-party companies will claim to have a great track record but really don’t. In some cases, an inexperienced firm will simply refer it out to someone that knows what they are doing, then collect a referral fee. Make sure that you do your diligence.
Repayment Plan: If you fell behind in payments and you’re in a better financial position than you were when you fell behind, your lender may be willing to create a payment plan with you. This plan would add a certain amount on top of your mortgage payment every month that will be applied to your arrears.
Payment Deferral: If you’ve fallen behind on your mortgage due to a short-term hardship that is now resolved, and you are able to resume your regular monthly payments, you may qualify for a payment deferral. This repayment option moves past-due amounts to the end of your loan term and immediately brings your loan to a current status. The deferred amount is due on your last mortgage payment date or earlier if you sell your home, refinance, or otherwise pay off your loan.
Refinance: If you are struggling to make your payment every month but are still current on your mortgage you may be able to apply for a new loan with better terms and conditions than your present loan. If you are already behind on your payments, then this may not be an option.
Equity Sale: When the market is strong and has been appreciating for a long period of time, most homeowners have built a lot of equity in their real estate investments. Equity is defined as the amount of capital left over after selling the property and paying off all the mortgages. In New Jersey, it is possible to gain as much as 24% equity in a year! The average home price for the first quarter of 2021 was $500,628 or 24% more than the $403,785 for the first quarter of 2020, as reported by NJ.com on May 05, 2021that that would be a gain of $100,000 in a year. There is a philosophy that almost all wealthy people live by… Buy Low and Sell High. When the market is extremely HOT, like it is right now, the amount of money that can be made by the average homeowner is astounding. What makes an equity sale even more attractive is that, in almost all cases, the profit from the sale of your personal residence is tax-exempt. For a single person, the tax-exempt profit is up to $250,000. For a married couple, the tax-exempt profit is up to $500,000!!! How many investments can you think of that will give you that kind of return and pay little or no income tax?
If you’re behind on your payments with a lot of equity in your home, then you may benefit enormously by selling your house, getting caught up on your debt, and putting money away in the bank (tax-free) until the market is in the buyer’s favor again.
Don’t get caught up in the need to be a homeowner right away. If you just sold your home because you were behind on payments, it’s quite possible that qualifying for a new loan to buy another home may be difficult. This could be a blessing in disguise. In the time that it takes to rebuild your credit and raise your score the market conditions almost assuredly will change. In fact, you may end up being in a red hot buyer’s market! I’ve seen market conditions depreciate as much as 20-25% in a year. If that happens, then a house that was going for $500,000 before the market correction will sell for $375,000 to $400,000 after the depreciation. Now that’s worth waiting for!
If selling your home is on your mind just Call 908-494-4611 Douglas Ramos and Doug will help explain any of the options described in this article. To find out
To find out what you can get for your home in today’s market go to my Home Value Tool.
Short Sale: In the event that none of the above solutions work and you fear that foreclosure is a real possibility, then a Short Sale is an excellent alternative. Entering into a short sale listing agreement will usually give you much more time to stay in your home before the bank forecloses. I’ve represented homeowners in foreclosure that gained an additional 12 to 16 months in their home by selling through a short sale. This also gives the homeowner plenty of time to decide where they are moving; and, more importantly, when they are moving. One of the worst scenarios for moving is when an eviction notice has been posted and you have to move within weeks, or sometimes, even days!
The majority of my clients have been able to move on their own terms, and in most cases, with a check from their bank or servicer to help with moving expenses. Depending on the value of the home and other factors, these checks can range from $1,000 to as much as $5,000!!!
Deed In Lieu: This is a last-ditch effort to avoid foreclosure and eviction. A Deed In Lieu (DIL) is an agreement between the bank and the homeowner that allows the homeowner to give the property back to the bank and avoid foreclosure. It usually involves the bank sending a representative to inspect the property before the agreement is signed to assess any damage or missing fixtures. Occasionally, the bank will allow the homeowner to stay in the property for 60 days, but they typically want possession of the property in 30 days or less.
Beware of Scams!
Times of crisis and financial stress always bring out “bottom feeders” that prey on the desperate. These criminals will often present offers that sound too good to be true. They may tell you that they can guarantee that they can stop foreclosure against you, or that they can keep you in your home no matter what the bank tells you. Oftentimes, they will tell you to cease communication with your lender or servicer. Don’t fall for the bait. Protect yourself by asking questions, reading the materials provided to you by your lender, and avoiding any solicitations requiring up-front cash payments. The only time that you should ever consider paying upfront money is if you hire an attorney and they require a retainer fee. Keep in mind, that an attorney is not usually needed to work out your situation with your lender, and should only be a last resort. In fact, there are some law firms that solicit homeowners that fall behind on their payments, so be very aware of their intentions.
Here are some other sources of information:
AVOID FORECLOSURE: NEW JERSEY
Don't lose your home! Here is some guidance on default and foreclosure prevention.
- Making Home Affordable
- Housing counseling - counseling on buying, renting, defaults, foreclosures, credit issues and reverse mortgages
- New Jersey Housing & Mortgage Finance Agency - foreclosure prevention resources
- New Jersey Fair Foreclosure Act - organizations providing financial assistance or counseling to borrowers
- Legal assistance
- New Jersey Office of Consumer Protection
Douglas Ramos is a well-qualified, result oriented Real Estate Broker/Owner who has been selling Real Estate since 1995 and has an intense passion for the business. “Homeownership is the American D....
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