Here's a question that many of you may be asking yourself, but not admitting to the very real possibility . . . will we lose our home?
In California's current real estate market, it's a fair question for many. First and foremost . . . do NOT avoid the issue and do not avoid discussion of the various alternatives with your trusted source - your REALTOR. The sooner you seek help the better your options will be.
The good news is that there are many avenues currently available to help you keep your home. I have found the banks to be very agreeable lately with homeowner workouts.
Let's say that you're currently challenged with making your house payment, but you hope to have the opportunity to "catch up" in the near future. Maybe you're a commissioned salesperson and you haven't had a sale in awhile but you've got a few in the pipeline. You can contact your lender and request several options for reduced or "skipped" payments. This is called forbearance. If you've already missed several payments and you are now ready to "get back on track" you can request a plan to "catch up" over the next several months. This is called a Workout. An experienced agent will be able to guide you through the specifics that best apply to your scenario.
Perhaps there's little hope in your future for an improvement . . .let's say you have an adjustable rate mortgage that is skyrocketing and the current sales comps don't allow for refinancing because you owe more on the property than the comparable homes are selling for. You can contact your lender and request a rate freeze. Many lenders will now consider this option. You can also consider a Short Sale.
A Short Sale is where an agent assists you in selling your home for less than what you owe. All lenders involved (some homeowners have two or three) must approve the sale and will base their decision on your hardship as well as the recent sales comps. Due to the extensive negotiation and communication skills required for a Short Sale, the more experience your agent has with Short Sales the smoother this process will be. Your agent's knowledge will also come in handy for damage control to your credit, as one of the facets of the negotiation will be how the lenders will "note" your credit report for the Short Sale.
If you are working with an agent through the Short Sale process, then you will be keenly aware of your foreclosure timelines, as these will generally be extended while you are actively working through a Short Sale. At the very worst, if your home doesn't sell and you are facing foreclosure, your agent will be able to help you maximize your timeline for staying in the home and help inform you of exactly when you need to vacate. A good agent will also be able to help place you in a rental home despite your current credit challenges in the wake of the foreclosure.
To sum all of this up, the good news is that the banks WANT you to keep your home and they are now more willing than ever to find creative ways to make this happen. Read the article linked below for more information on this subject.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/12/AR2008021200447.html
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