Westchester and Putnam County Foreclosure Prevention

February 1, 2009 · Print This Article

Are you a homeowner that is in distress? Are you behind on your mortgage payments? Did you lose your job and soon will no longer be able to make mortgage payments? Have you already received a call or letter from your lender that they have started the foreclosure process on your home?
Despite what you may heard a bank does not want to foreclose on your home but the bank absolutely will foreclosure on you if you did not seek foreclosure prevention options right away. Below is a list of options for homeowners in foreclosure:
In order to reinstate a mortgage, you must pay all missed payments, late fees, and legal fees that are due up until the date that the loan is reinstated

Forbearance or Re-Payment Plan
If you do not have the means to repay all of the missed payments and legal fees, then this is another option that also reinstates the mortgage.  The lender allows the homeowner  to pay the missed amount over a period of time or they place the missed payments at the end of the amortization of the loan

Sell the Property
If you have equity in your house, you can sell it and cure the foreclosure  A licensed real estate agent experienced in the foreclosure process can help a homeowner harvest from the home sale as much of your hard-earned equity as possible. When choosing a Realtor make sure to choose a Certified Distressed Property Expert (CDPE) who understands the foreclosure process and is aware of the foreclosure timeline and pricesyour property accordingly.

Rent the Property
In some cases, a homeowner facing foreclosure that has mortgage payments low enough to allow him to rent the property and keep up the mortgage payments.  This is usually a short-term solution since when taxes and insurance payments come due, many homeowners cannot afford them.

If the homeowner has sufficient equity and income and their credit has not been too badly damaged, you may be able to refinance.  This is also typically a short-term solution since payments on the property usually go up considerably due to the refinance.

Mortgage Modification
In some cases where homeowners do have the means to afford their mortgage payments or very close to their mortgage payments, the bank may qualify them for a mortgage modification.
This relatively new phenomenon shows just how far some mortgage companies and lenders are going to avoid foreclosing on properties.  This process involves the refinance of a home with a reduction in the principal balance and often the interest rate as well. The homeowner will have to apply for this process both in showing a hardship as well as demonstrating the ability to pay the new mortgage through a fully documented qualification process.

Deed-in-Lieu of Foreclosure
This option is sometimes referred to as a “friendly foreclosure” since you essentially give the deed to your property back to the bank. If owner has equity in the house, this is not a good option since they give up any right to the property and any equity when using Deed-in-Lieu as a solution

A bankruptcy may stop a foreclosure and allow a homeowner to reorganize his debt and keep his property.  The reality however, is that most of the time this is not the case and the bankruptcy only stalls the foreclosure.  If the homeowner is not to make payments after bankruptcy, the house will foreclose anyway.
The other major drawback to bankruptcy is that it makes it very difficult for the homeowner to sell his property once he enter the process. 
Servicemembers Civil Relief Act (SCRA)
Signed into law on December 19, 2003, the SCRA provides certain protection to military personnel that are in foreclosure in specific situations.  The law also provides Servicemembers other protections
It is important to note that this relief is only temporary and in many cases the most prudent course of action for a Servicemember is to sell their property. 

*** Short Sale ***
When a homeowner owes more on a property than it is currently worth and one of the above solutions do not apply to their situation, there is an option of pursuing a short sale.

A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company or companies to accept less than the full balance of the loan at closing.  A buyer closes on the property and the property is ‘sold short’.
In the past it was rare that a bank or lender would accept a short sale however due to overwhelming market changes lenders have become much more negotiable when it comes to these transactions.  Recent changes in policy within many organizations have made the chances of getting a short sale approved even higher!
In some areas as may as 50% or more of the properties that are selling are related to a short sale or a banked owner property. According to the database on Foreclosures .com, there are currently over 1.8 million pre-foreclosures (owners who are behind on payments and have been reordered publicly), over 1 million auctions and over 1.4 million REO’s (properties already taken over by the bank after foreclosure.
In order to start the short sale process a homeowner will need to seek the services of a Realtor who works with banks on a regular basis helping homeowners. There are only 1000 Certified Distressed Property Experts (CDPE)  in the United States and a CDPE is one of the best chances a homeowner has to complete a successful short sale. There are NO FEES involved or costs to the homeowner, the bank pays all fees including closing costs, late fees and attorney fees!
If you would like a no obligation free phone consultation about your options to help prevent your home from going into foreclosure call me at 914-403-4868 or email [email protected]


Westchester and Putnam Short Sale Properties.



One Response to “Westchester and Putnam County Foreclosure Prevention”

  1. Stop Foreclosures with a short sale | Avoid foreclosure and save your credit | Putnam-Westchester-Homes.com on February 3rd, 2009 7:11 am

    […] future that will prevent you from making your mortgage payments? Know your options…there are alternatives to foreclosure that can pay off your debt and preserve your credit.   Fact: Your bank does NOT WANT TO […]

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