There are five different outcomes a property owner may come to when facing a potential foreclosure. Here they are in order to help you understand your foreclosure prevention options, stop foreclosure in Florida, and protect your financial future!
If you want to stay in your home you will need to work with your lender on finding a solution. Possible solutions are a refinance, loan modification, repayment plan, or forbearance plan. Do not hesitate on calling your lender to discuss your situation. Do it immediately.
If you have sufficient equity to pay off the loan then take advantage of today’s market and sell your property. Are there other loans tied to the property such as a second mortgage and home equity line of credit? There are the costs to sell to also consider. Is there enough equity to cover all the above? Be Proactive.
Sometimes there is enough equity to pay off the first loan and the costs to sell, but not enough money to pay off any other loans against the house in full. This means negotiating with the other lenders (lien holders) to accept less than the full balance of the loan.
3) If you are unable to sell your property at a high enough price to pay off your loan plus expenses you will end up with a shortage of funds. Then this leads to potentially selling your property as a “Short Sale”. It is called a “Short Sale” because your lender will not be receiving sufficient funds to pay off the loan balance, this is a shortage. There must be a justification presented to the lender to accept a shortage amount.
There must be financial hardship on the property Owner to move forward with a short sale. This means you do not have other money available to pay the shortage amount out of your own pocket. As a Certified Distressed Property Expert, I can provide insight on the process and assess your situation, so, call me at (850) 616-6377.
Deed-in-lieu of Foreclosure. This is not an optimal solution at all. This should be a last resort after attempting the first 3 solutions. It is still considered a foreclosure. Forgiveness of debt has consequences. Lender can levy a “deficiency judgment” and file a 1099. The deed-in-lieu can appear on the credit report as a foreclosure. The deed-in-lieu “keeps the lender from going through the lengthy foreclosure process”, saving them time and money.
Foreclosed. The foreclosure is a process that ultimately leads to your property being foreclosed. The property goes back to the owner of the loan, known as the “investor”. Your hands are not wiped clean when this happens. There can be a deficiency judgment levied against you and it will be at a higher amount than a deed-in-lieu. Keep in mind in a successfully negotiated short sale the result should be the lender waiving their right to pursue a deficiency judgment and accepting the shortage amount.
The first three options give you control over the outcome. Even in a short sale you and your agent have a strong negotiating position to end up with the best result for you.
MORE INFO ON FORECLOSURE PREVENTION
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“Jack is the best real estate agent I have ever had the pleasure to work with. He took on a very difficult short sale that most other agents would not even consider and then was diligent and professional. Most importantly, he was successful. When challenges popped up, he overcame them. If I ever do another real estate deal in Pensacola, Jack will certainly be the first person I call. I have worked with many so-called real estate professionals that are more of a liability in getting a transaction complete than an asset. They must be babysat throughout the deal. I would trust Jack to handle every aspect from start to finish and to have my best interests covered every step of the way.”
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