How to Avoid Foreclosure

October 19, 2009 by  
Filed under Blog, How to Avoid Foreclosure

How to Avoid Foreclosure?

There are several steps involved in avoiding foreclosure.  I have so many friends call me regarding the auction of their property and asking for any type of help or advice.  Ok so here it goes, to all of you who are facing the same types of problems as my friends.

First and foremost, you are going to want to get as much information as possible.  Some homeowners really don’t understand that there are other options out there and it is important to ask how you can avoid foreclosure.  This is a norm in society at this point, so there is no need to feel embarrassed.

A couple of options available to you are filing for bankruptcy, loan modification, deed-in-lieu, and short sale.  These are the options that will help you prevent foreclosure.  When filing for bankruptcy the banks might be able to help you keep your house and repay the lender under different terms set up for you.  When attempting to get a loan modification, please don’t get your hopes up because there is a large number of homeowners who are being denied.  A loan modification might reduce your monthly mortgage payment but it will not decrease your negative debt owed on the property.  A deed-in-lieu is when you hand over the keys to the bank and just walk away from the property.   In essence you are giving up the deed to avoid foreclosure.  Lastly, if you are upside down on your property, and don’t want to be foreclosed on then a short sale is your best option.  It is the nest way to get your negative debt cleared.  The only issue with a short sale is that there can be some tax implications.  These are your best options to avoiding foreclosure.

The next step I would advise to homeowners is to stand up and get the right type of help.  Don’t be afraid to ask for help.  Look for some credible companies on the internet and go with the company that you feel is most credible.  Be careful who you choose to work with, as there are several scam companies out there.  Just because someone says that they specialize in short sales, does not mean that they actually do.  Get as much research as you possibly can and make sure they have successfully completed short sales prior to working on your file.

It is important to get started immediately and make sure that you don’t procrastinate on this.  This is your future and you need to act with a sense of urgency.

One should understand the tax implications when looking to do a short sale.  Fortunately the president just signed a law that forgives homeowners of these tax implications, but it is always prudent to speak to a CPA who can advise you better.

This can be an emotional time in a persons life, as you are losing a home and needing to find another property to live in quickly.  So it is important that homeowners act fast, and don’t wait on this.   But just remember that you are making the right decision and you are setting yourself up for a brighter future!

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