Frequently Asked Questions
I’ve missed a few mortgage payments, how will that affect me? Your home may likely undergo the foreclosure process, but there are many ways that you to prevent this unfortunate event from happening.
What should I do if I begin to fall behind on my mortgage payments? Don’t hesitate, get the help you need right away! By actively working to resolve this issue as soon as possible, you can greatly increase your chances of avoiding foreclosure and the loss of your home. Even if you see the possibility of missing a mortgage payment, contact your lender or financial institution and explain your situation. This act of initial contact and being proactive, before letters of delinquency come, will help your lender comprehend that you are facing issues head-on that impede your payments, providing your lender an incentive to find a proper “work out” resolution, and/or to begin modifications to your loan.
Exactly what is a “work out” resolution? Most commonly, the term “work out” resolution is an agreement between a lendee and the lender where the lendee can continue making payments on their past due amount over a period of time, or a modification to their loan to lower the interest rate, or an extension loan period that will help lower their payments.
I am currently in the foreclosure process, should I stay in my home or leave? You should contact your attorney immediately to determine the best course of action. Abandoning your property or walking away from any contractual obligations may have severe negative consequences on your qualification for future assistance.
Why would my lender rather help me stay in my home than foreclose? There are several reasons why your lender may in fact be interested in other options than entering into foreclosure. Most times, the lender will have to take substantial financial losses, on average $50,000, from a home foreclosure. Mortgage companies are not interested in owning and selling homes. It is simply not in their best interest.
How common is foreclosure? Unfortunately, foreclosures are becoming more and more commonplace and happen to many Americans. Although the number of foreclosure filings vary from state to state, and even from one financial quarter to the next, the number of filings nationally in 2008 was 3.1 million for 2.3 billion U.S. properties. This is an increase of an astounding 81% from 2007 and represents 1 in 54 housing units in America having received at least one foreclosure filing during 2008.
Is a Short Sale something that is right for me? If you add up your total monthly expenses, including your mortgage, property tax payments, car payments, insurance, utilities and food and compare that to your take-home income, and see how much longer can you afford to keep up with your payments? If you have an adjustable rate, and the payment is going up, how long can you afford that? Is it worth prolonging your current financial situation?-especially if home values in your area are continuing to decline?
How much would it cost me to sell my home in a Short Sale? Absolutely nothing! All fees and commissions are absorbed by your lender-NOT YOU. Your contract will specifically read: “Seller’s agreement to sell is subject to approval by existing lender of a Short Sale at no cost to Seller” Seller shall not be required to deposit any funds to close escrow.
Technically, what is a financial hardship? A financial hardship is a situation that has a life changing effect for the borrower that results in an inability for the lendee to pay the mortgage debt in either short or long term.
Some examples are:
*Separation or Divorce
*Inability to work due to health reasons
*Death of Spouse
*Reduced Income or Unemployment
My property needs a lot of repair work. Can I still quality for a Short Sale? Yes. A lender is often less likely to want to repossess (foreclose) on an Orange County home that needs work or repair-it would only make it harder for them to sell it later. Lenders are not in the “home repair” business or do they desire to be.
They do not want the responsibility or the headache. A home in rough shape may serve as an incentive for a lender to do a Short Sale.
Do I have to deal with the lender throughout the Short Sale process? As your agent, we take on the task of communicating and negotiating with your lender relieving you of that stress and burden.
Do you have any other advice that may benefit ne? Always be wary of potential scams. Any person or company offering a “quick-fix” solution that sounds overly optimistic may be trying to take advantage of you during your time of financial troubles and desperation. Some warning signals of a scammer include anyone who charges a fee before any services are completed. Never pay anything up-front!