Foreclosure prevention can help you avoid default, work out a repayment plan or strategize on the best option for letting go of your house. We are well-versed in the ways of short sales, Deed-In-Lieu, loan modifications and are happy to help you explore those other options when you are facing a foreclosure. Give us a call to discuss what option is right for you.
Short Sale Negotiation
Are you “underwater” on your mortgage? Are you having trouble selling your home because you owe more than your home is worth in the current market? A short sale may be the solution for you! A short sale may be appropriate in circumstances when a home needs to be sold at an amount lower than what the seller owes on the mortgage. As an option that can be utilized in the event of demonstrable financial hardship, short sales can be an excellent alternative to foreclosure. They allow homeowners to avoid some of the damage a foreclosure would do to their credit report and avoid taking financial responsibility when they owe more than their home is worth. The bank must approve the sale and be willing to accept the “short” payment amount. Banks will often consider a short sale because in most circumstances it allows them to recoup some of their investment without the added costs associated with a foreclosure and the sale of the property. We can work with your realtor and the bank to ensure that the process runs smoothly.
Irresponsible and greed-based sub-prime lending has placed many homeowners in financial hardship, even in financially stable and some would say affluent states such as Washington. Fortunately, there’s a newly implemented solution for homeowners that has the potential to prevent the impending and, or indefinite foreclosure of your home. This process may seem simple on its face, but it can become very burdensome and frustrating. We are here to help you through this process to ensure that your mortgage servicer is following through on each step in the process.
A loan modification may assist you by essentially clearing your past mortgage late payments and simultaneously work to lower your monthly mortgage payment by “modifying” the guidelines and stipulations of your current mortgage(s) loan. Antoinette M. Davis Law, PLLC will work with you to gather and obtain the necessary documentation, and analyze the details of your your unique real estate and financial circumstances to determine your eligibility and come up with a customized negotiation plan. Thereafter, Antoinette M. Davis Law, PLLC will negotiate with your lender a viable loan modification, i.e., a lower interest rate and in some cases principal forgiveness, just for you!
Home Affordable Modification Program (HAMP)
If you’re not unemployed, but you’re still struggling to make your mortgage payments, you may be eligible for the Making Homes Affordable Home Affordable Modification Program (HAMP). HAMP can lower your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income, which usually provides savings of hundreds of dollars per month.
You may be eligible for HAMP if you meet all of the following criteria:
- You occupy the house as your primary residence.
- You obtained your mortgage on or before January 1, 2009.
- You have a mortgage payment that is more than 31 percent of your monthly gross (pre-tax) income.
- You owe up to $729,750 on your home.
- You have a financial hardship and are either delinquent or in danger of falling behind.
- You have sufficient, documented income to support the modified payment.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
We help consumers currently in default on a mortgage loan, as well as those that may anticipate a default is on the horizon. We can’t guarantee you that you’ll be able to stay in your house, but we’ve got lots of tools in the tool belt to try to make that a reality, including foreclosure mediation (for those that qualify).
Home Affordable Foreclosure Alternatives Program (HAFA)
The federal government has guidelines and forms that are specific for short sales. The Making Homes Affordable Home Affordable Foreclosure Alternatives Program (HAFA) provides financial incentives to loan servicers and borrowers who utilize a short sale or a deed-in-lieu of foreclosure (DIL) to avoid foreclosure on eligible loans.
To qualify for HAFA, a homeowner must meet the following guidelines:
- The property is the borrower’s principal residence;
- The mortgage loan is a first deed of trust originated prior to January 1, 2009;
- The mortgage is delinquent, or a default is reasonably foreseeable;
- The current loan balance is less than $729,750;
- The borrower’s total monthly mortgage payments exceed 31% of the borrower’s gross income.
The benefits of HAFA:
- Minimum Net Price: Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds). The minimum net proceeds may be either a fixed dollar amount or percentage of the current fair market value of the property. It cannot be increased for 120 days.
- No Commission Reduction: Prohibits lenders or their loan servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).
- Release of Remaining Loan Balance: Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
- Standardized Documents: Uses standard processes, documents, and timeframes/deadlines.
- Financial Incentives: HAFA provides the following financial incentives:
- $3,000 for borrower relocation assistance;
- $1,500 for servicers to cover administrative and processing costs;
- $2,000 for investors for allowing a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).