Alternatives to Foreclosure...

Here are some of alternatives to Foreclosure...

1.  Reinstatement ...the homeowner requests the total amount owed to the mortgage company to date and pays it.

2.  Forebearance or Repayment Plan...the homeowner negotiates with the mortgage company to allow them to repay back payments over a period of time.  The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

3.  Mortgage Modification...involves the reduction of one of the following...the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these.  These typically result in a lower payment to the homeowner and more affordable mortgage.

4.  Rent the Property...the homeowner who has a mortgage payment low enough that market rent will allow it to be paid, can convert their property to a rental and use the rental income to pay the mortgage.

5.  Deed in Lieu of Foreclosure...allows the homeowner to return the property to the lender rather than go through the foreclosure process.  Lender approval is required for this option, and the homeowner must also vacate the property.

6.  Bankruptcy...if the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution. 

7.  Refinance...If a homeowner has sufficient equity in their property and their credit is still good standing, they may be able to refinance their mortgage.

8.  Servicemembers Civil Relief Act (military personnel only)...if a member of the military is experiencing financial distress due to deployment, and that person show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act.  The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

9.  Sell the Property...homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

10.  Short Sale...If a homeowner owes more on their property than it is currently worth, they can hire a qualified realestate agent to market and sell their property through the approval of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify.  Hardship can be defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation.  Acceptable hardships include but are not limited to:  mortgage payment increase, job loss, divorce, excessive debt, illness or death in the family, significant cut in pay, forced or unplanned relocation, and more.

This represents only a summary of some of the solutions available to homeowners facing foreclosure.

Understanding your options now could mean all the difference in the world.

If you want to consider a Short Sale as an alternative to foreclosure...please contact Janice Vanden Berg at #616-355-6326 for a free confidential consultation.


Janice VandenBerg

Janice VandenBerg

Associate Broker
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