Options to Avoid Foreclosure

What are your options to avoid foreclosure?  I have listed them below.  Be sure to also checkout our Options To Avoid Foreclosure Audio Tour.

I’ve divided the options into two sections, one for those who’d like to keep the property and one for those who just want out of the property.

- IF YOU’D LIKE TO KEEP THE PROPERTY -

1. DO NOTHING – Stay in your home or if it’s an investment continue to rent it – if you have no need to move, like where you live, make money off of your investment property, or have an endless supply of cash to makeup for any monthly losses then you should be fine.  You can ride the market out and eventually it will come back.  Be sure to keep your payments timely.
2. RENT – rent your property out.  If you can meet your monthly mortgage obligation by renting then maybe this is a good option for you.
3. REFINANCE – If you have equity in your home and still have good credit and stable income you may be able to refinance to a better rate and lower payments.
4. MAKING HOMES AFFORDABLE REFI OR LOAN MOD – this is government program and not everyone qualifies but if you do this may be a way to keep your home and make the payments more manageable.  More info here:  http://makinghomesaffordable.gov/
5. LOAN MODIFICATION – You may be able to qualify for a loan modification where the lender modifies the terms of the deal (better rate, longer term, and the rare but possible principal reduction).  Be wary of loan mod scam artists – find a reputable company or contact your lender directly.
6. FORBEARANCE – Your lender may be willing to give you time to makeup lost payments and get back on your feet.  Contact your lender and see what they will do for you.

-         IF YOU JUST WANT OUT OF THE PROPERTY –

1. SELL IT – If you have equity you may be able to sell the property and still make money at close.  If you have little equity you still may be able to sell and keep your costs low so you can just come out of pocket a little at closing and just be out of the deal.
2. DEED-IN-LIEU – This is where your lender takes your property back “in lieu” of foreclosure.  Lenders don’t want your property and usually only do this if there is equity in it, in which case you are probably better off selling it outright.
3. BANKRUPTCY – Have a qualified bankruptcy attorney help you with the filing of a Chapter 7, 11 or 13.
4. SHORT SALE – This is where you sell the property for less than you owe and the bank accepts the deal.  This is becoming a very popular option but make sure you hire a qualified short sale agent to help you as they act as your negotiator with the bank.

Those are the options available to you and the best thing to do is to learn all you can about these options and do what you feel is right for you and your situation.

Visit our Arizona Short Sale website for more information about short sales, how to avoid foreclosure scams, loan modification scams, and more!

Related posts:

1. Options to Avoid Foreclosure – Audio Tour
2. Short sale or not to short sale — That is the question!
3. Arizona Foreclosure Process
4. HAFA – Home Affordable Foreclosure Alternatives
5. “Avoid Foreclosure” Webinar a success!