In our market area (Sarasota, Florida) 1 in every 7 homeowners with a mortgage is in default on their mortgage. As a result, many homeowners in our area are faced with the concern of how to prevent foreclosure and resolve their financial situation. There are many solutions that a lender could offer a homeowner to avoid foreclosure, which include:
Reinstatement - Where the lender reinstates the current mortgage after all the missed mortgage payments are made up.
Forbearance - Where any missed mortgage payments are added to the mortgage and are to be paid off later.
Deed in Lieu of Foreclosure - Which is a voluntary foreclosure. The homeowner voluntarily deeds their property to the lender.
Short Sale - Where a homeowner usually stays in their property until the property is sold to a new buyer and the lender agrees to accept less than what is owed on the mortgage to facilitate the sale.
Mortgage Modification - Where the lender reduces the interest rate and sometimes the terms of the mortgage so the homeowner can financially afford to stay in the home.
Bankruptcy - This does not necessarily prevent foreclosure, but it will delay the process depending on the timing of the bankruptcy.
Will the lender reduce the Principal Amount of the Mortgage on a Mortgage Modification? Normally the lender will NOT reduce the Principal amount of the mortgage, on the basis that if they did this (on mortgages that are in default) it could create a much greater number of defaulted mortgages because, potentially, many homeowners would then voluntarily let their property go into foreclosure to reduce the principal amount of their mortgage.
What are the conditions of allowing the lender to take my property back "Deed in Lieu of Foreclosure"? Lenders will usually not take back a property "Deed in Lieu of Foreclosure" if there is a 2nd mortgage on the property. Deeding over a property does not necessarily prevent the lender from later filing a deficiency judgment to the homeowner for the lender's loss.
What is the impact to my financial recovery with a Short Sale? A Short Sale may be the quickest way to financially recover as it has much less impact on your credit, whereby many homeowners can repurchase a new home in as little as 2 years. To successfully complete a Short Sale, a homeowner needs to list their property with a Real Estate Broker who is knowledgeable and has experience in working with Short Sales.
The Troy Funk Team, with Keller Williams Realty in Sarasota, has successfully closed over 100 bank-negotiated sales in the Sarasota real estate market area in less than a year. Troy Funk has earned his CDPE and SFR certifications in Short Sales and is also an active member of REONetwork, Res.net, LPS, Dispo Solutions, and Equator. The Troy Funk Team consists of 6 members who work together to successfully close Short Sales. For more information on Options to Foreclosure, visit their website at: www.TroyFunk.com or to preview Short Sale homes for sale in the Sarasota, Bradenton, Venice, or Lakewood Ranch areas, visit their site at: www.SarasotaRealEstateGallery.com
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