First American Homesavers


Foreclosure Alternatives

Since we are obtaining new workouts daily it is very hard to keep this page up to date. Please contact us to get up to date plans that we have received from each Mortgage Company.

Reinstatement

Repayment Plan

Loan Modification or Loan Restructuring

Loan Refinance

Loan Forbearance

Short Sale

Deed in Lieu










Reinstatement: The Reinstatement amount is total amount that is past due amount including late fees and other lender fees. Paying this amount will 'reinstate' your mortgage immediately. If you are able to promise a lump-sum to bring your payments to a current status by a specific date, you may be eligible for a Reinstatement.

Evaluate what funds you have available. Many clients have retirement funds, credit cards or insurance policies that can be liquidated to provide the cash to stay secure in their home. Alternative sources may include private loans from family or friends or co-workers. A Reinstatement will offer you the quickest method for resolving your mortgage foreclosure. With your foreclosure resolved you can enjoy the security of your home.

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Repayment Plan: The most common way of resolving a loan default is to work out a plan (Repayment Plan) which will let you repay part of the delinquency each month, along with you regular monthly installment. Most of our clients will be eligible for a Repayment Plan for the amount they are delinquent if their financial circumstances have stabilized. Most of our clients have realized a short term financial hardship that has caused them to become delinquent. They are now financially back on their feet and need help getting caught up. We will negotiate with your lender to distribute your past-due amount over a set period of time, usually 18-24 months, depending on your circumstances. Your lender will usually ask for 25-50% of the arrearage down and the remainder will be paid out over a period of months.

This type of solution to your mortgage foreclosure is generally accepted very well by lenders. We will complete a detailed financial portfolio of your income vs. your expenses to show the lender what payment that will work with your current income along with what down payment that you can afford. This will bring your account up to date immediately and keep you secure in your home.

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Loan Modification or Loan Restructuring: A large number of clients will use a Loan Modification Plan to stop foreclosure. If you can currently make your regular payment, but you can’t catch up with the past-due amount, we will negotiate with your lender to fold any past-due amounts, including interest and escrow, into the unpaid principal balance. This new amount will be re-amortized over a new period of time.

If you are unable to make payments at this rate, we will negotiate with your lender to extend your loan for a longer period of time, modifying the loan amount to a more affordable level. A Loan Modification will change your existing mortgage note and give you a fresh new start in managing your home. Your account will be brought up to date immediately.

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Loan Refinance: In some instances, First American Homesavers may be able to arrange new financing, but this will depend on your income, credit report, the value of your home, the amount of your equity and your current financial position. Although it might be difficult to secure new financing with a default on your existing mortgage, it is still possible.

Do you think you can’t get refinanced because of your bad credit? Most people don’t realize that even if their credit is bad they can still get refinanced. We look at other things like equity, the reason your credit is bad, how your current financial situation has changed and your last 12 months of credit history. These criteria can out weigh any credit score. The overall credit score sometimes does not give a true picture of your financial stability and it needs to be amended. We can also advise you ways to improve your credit by disputing inaccurate items in your report. We can give you a loan when other Mortgage Companies have turned you down.

When is the time to refinance? You need to look seriously at refinancing when you need to lower your payment, when you need some cash, when you are in Foreclosure and have no other options and if you have an Adjustable Rate Mortgage and it is nearing maturity. These scenarios are perfect examples of when and why to refinance.

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Loan Forbearance: Some of our clients are eligible for Forbearance, which will give you time to gather your assets. In Forbearance, you are allowed to delay or reduce payments for a short period, with the understanding that another option will be used at the close of that time to bring your account to a current status. Your lender, if in agreement, will then temporarily cease legal actions. Lenders may agree to combine your Forbearance with Reinstatement or a Repayment Plan if you know you can provide the needed funds to bring your account current by a specific date. This plan works for people who have just experienced a sudden living expense increase or income loss. We will negotiate with your lender to explain this hardship and hopefully get you the time you need to readjust your spending and recover financially.

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Short Sale: For some clients, selling their home is actually the relief that they need. After reviewing your financial portfolio, it may become obvious that you can no longer afford your home. Many owners have often realized this and tried unsuccessfully for months to sell their home through traditional real estate methods. But, because of market fluctuations and changes beyond your control, sometimes your home may not sell at the anticipated full price of your loan. A Short Sale allows you to sell your home to a third party at a price which is less than the total amount that you owe.

What is a Short Sale? A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. Instead of buying from a seller, you are purchasing the property directly from the lender for a discount. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $300,000. You write an offer to the lender for $220,000, which is accepted as full payment for the loan. This is a short sale. Why are they willing to take such a discount? Several reasons. First of all, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity where they can sell the property without a huge loss, they will do it. Secondly, lenders know they could lose a lot more money if the property goes to auction. There are so many fees involved if the property goes to auction, that they would be better off taking the discount beforehand and be finished with the headache of it all.
Your lender will use the proceeds from the sale to pay off the mortgage and the remaining balance will be negotiated or perhaps even forgiven. This avenue is open for homeowners who are willing to part with their property but keep their credit rating with the least amount of negative reports. Negotiating a Short Sale with the lender is a difficult process, generally because it is very hard to find the bank officer who has the authority to accept a discount. Much like getting your phone bill corrected, you can expect the process to involve a lot of waiting on hold and being bounced around an intricate maze of automated voice mail systems. Once you get in touch with the right person, then the hard work and the negotiating can begin. The Mortgage Company may require a written contract with you and the buyer, a HUD-1 or settlement statement of the sale, a buyer assurance letter stating the potential buyer is approved for the new loan, proof that the house has been on the market for 90 days with a Real Estate Agent and financial information from you showing that you can’t afford the house. Many short sales fall through for a number of reasons. We have successfully negotiated a Short Sale for many home owners and we know what the Mortgage Company needs for approval and in what order.

If you are willing to sell your home or currently have your house on the market, some lenders might agree to put your foreclosure on hold while you attempt to sell your home through traditional real estate methods. You may be able to qualify if your mortgage is at least 2 months delinquent, you are able to sell your home within 3-5 months and your new appraisal shows that the value of your home meets HUD program guidelines. You will be able to pay off your mortgage loan to avoid foreclosure and prevent any damage to your credit rating.

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Deed in lieu of foreclosure:The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principle advantage to the borrower is that it immediately releases him from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he would in a formal foreclosure.

If you have been unable to make your monthly mortgage payments and have also been unsuccessful trying to sell your home at the market value, this form of foreclosure may be what is necessary to get you back on track. This procedure allows you to transfer your property voluntarily to your lender or Mortgage Company and your debt or deficiency is often forgiven. This will not save your home, but it will help you with your chances of getting another mortgage loan in the future and it will help you avoid the lengthy legal process of foreclosure.

Although it is a negative strike on your credit rating, it is less harmful than a mortgage foreclosure. Typically your Mortgage Company will require that your home has been listed with a Real Estate Agent for at least 30 days and there are no other liens on the property for them to approve you. Some Companies may also require that the property be vacant, an interior appraisal of the property and a minimum of 60 days prior to a Foreclosure sale. Let us help you with filing the necessary paperwork and negotiating with your Mortgage Company.

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