What are my options?
Q: “I’m not late o
n my payments, but I just do not see this market turning around anytime soon. Even if I could still obtain a loan modification, my home will still be underwater and I’ll more than likely have to move long before my loan is paid off. So, is ‘walking away’ my only choice?”
A: There are more options for homeowners than just walking away or even getting a loan modification. It is critical to speak to an experienced REALTOR® to be sure they present to you all of your options. You will then be able to make an informed decision based on your particular situation.
Of course, we have to assume the property you speak of is a home on land that is 2 ½ acres or less and is a completed, single, one or two family dwelling that is at least occasionally occupied by the owner or another party. Next, the key question is whether the unpaid loan is a purchase money loan or a refinanced loan. Because a purchase money loan limits the lender to foreclose only, the borrower is free to allow the home to be foreclosed upon with no additional personal liability for any deficiency in the repayment of the loan. Also, if a lender purses a “non-judicial” foreclosure (i.e., a trustee’s sale) for a refinanced loan, the lender waives the right to pursue any deficiency against the borrower. So, a homeowner can certainly allow the bank to take back the property based on that.
have been learning over the past several years that pursuing a foreclosure is not necessarily in their best interest either. The reason is, lenders are collecting far less money on foreclosures and it costs them far more money to maintain these assets when all they do is sit for sometimes months at a time. To them, these are liabilities and they want to wash them from their balance sheets as quickly and easily as possible. One other option available to a borrower that is becoming far more common and acceptable in this market is the short sale – which is where the lender agrees to sell the home to a buyer for less than what the owner actually owes for the home. This scenario would allow the borrower to avoid missing any payments and allow the lender to receive more money – a win/win situation. Whether the owner is currently on a loan modification or not, in a short-sale situation, it is critical to receive release documentation from all lenders of any liability for a deficiency in connection with the sale.
Indeed, some lenders, are appreciating the benefits of receiving more money for these distressed properties so they have actual instituted various ways to expedite the process and approval of the short sale in just two weeks time along with offering the borrower additional sums to assist in the moving out of the home.
So, the bottom line is that as a homeowner, you may have more options than you think and want to take, and it is worth taking the time to investigate all of your possible options to determine what your best of course of action will be. Don’t wait to contact me! Many of the Sellers I work with were surprised that we could help them sell their homes even though they have never missed a payment. Review the latest information published by the Arizona Foreclosure Task Force and download the workbook directly from the Attorney Generals Office! There are many misconceptions regarding the process and you can get the honest truth here. Help and hope are available to you. I am prepared to guide and consult you in this process. Don’t wait until it’s too late, find out what options are available to you and how I can help. Call me today.