AVOID FORECLOSURE

Listed below are some of the tools and techniques that you may be able to utilize to your benefit with the advice and guidance of our team of professionals, only after a thorough review and evaluation of your specific case.

Keeping your house 

Chapter 13 Bankruptcy: You may wish to keep your house and continue to live there, and to do this, you will need to either “catch-up” on the mortgage payments that you are behind on, or get the bank to “modify” your loan to make the monthly payments more manageable for you. A Chapter 13 Bankruptcy is a solution to the problem for many people who have regular income and just need some extra time to catch up on the mortgage payments that they missed. In some cases, if you have a second mortgage or home equity loan, we can ask the bankruptcy court to get rid of that loan all together to substantially reduce the amount you will owe to your bank. Filing a bankruptcy petition prior to a foreclosure auction is a very powerful tool to stop your bank dead in their tracks from taking your house away from you. To lean more about Chapter 13 Bankruptcy, please visit Massachusetts Bankruptcy Center and see how bankruptcy can help you, including getting rid of certain liens on your house.

Loan Modification: Another way to keep your house is to get your bank to “modify” or change the terms of your loan to make it easier for you to make the monthly payments. A loan modification is like re-writing the loan and it creates a “new agreement” between you and your bank. To do this, your bank will want to know about your current finances and how you plan to pay them if they agree to modify your loan.

Forbearance Agreement: In some cases, your bank will allow you to stop making the regular monthly payments for a period of time until you get back on your feet at which time, you agree to resume making the monthly mortgage payments. This is called a forbearance and like a loan modification, your bank will want to know about your ability to pay them in the future and where you will get the money to do that.

 

Selling or Surrendering your house

Traditional Sale: If you have equity in your house, meaning that your house is worth more money than you owe to the bank, you may be able to sell your house if the bank will give you some time to list it on the market for sale with a real estate broker. If you are able to sell your house and avoid a foreclosure and pay your mortgage off in full when you sell, that will solve your problems for the most part. Your credit rating will not have a “foreclosure” notation, which is very harmful to you in terms of borrowing money in the future and you will be free to buy a house again when you are ready. Our in house real estate firm may be able to assist you in this process.  Click here to visit Estate Realty, Inc. Estate Realty Inc to learn more about selling your home.

Short Sale: An example of a short sale is if you owe the bank $350,000 on your mortgage and the bank agrees to let you sell your home to a buyer for $300,000. In this example, the bank has agreed to accept less than you legally owe them as payment in full for the money you borrowed when you bought your house. Banks nowadays are agreeing to short sales because of the drop in real estate values and they see short sales as a way of cutting their losses. It is called a short sale, because under normal circumstances when you sell your home, you pay the bank off in full. With a short sale, at the closing or passing of the papers, you are “short” the amount of money to pay off the bank in full, but if they agree to this, it could benefit you greatly because you will have avoided a foreclosure on your credit rating.

Surrendering or “Walking Away”: When it is clear that other options will not work for one reason or another, or you have decided that you do not want to keep your house anymore and you want to stop making the mortgage payments forever, you can surrender or give back your house to the bank and file a Chapter 7 Bankruptcy. With this type of bankruptcy, which many people will qualify for, your bank is listed on your bankruptcy petition as a creditor and you also state your intention to surrender the house back to the bank and upon receiving a “discharge in your Chapter 7 Bankruptcy case, you will no longer owe your bank any money. For many people who have simply had it with making big mortgage payments for a house that has dropped in value due to the recent economic climate, this option can be best for getting out of enormous debt and getting a fresh start. To lean more about  Chapter 7 Bankruptcy, please visit Massachusetts bankruptcy Center and see how bankruptcy can help you.