Home Owners Find Mortgage Delinquency Help With Foreclosure Options

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Home foreclosures are making history at nearly 6,000 each day. There were 179,599 foreclosure filings in November 2007 with the biggest foreclosure states being California, Ohio and Florida. While the housing moguls look to Congress to bale out that industry, Second Opinion Solutions Group, LLC shows Americans how to prevent foreclosure by first understanding their foreclosure options.

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The American dream of home ownership is going up in flames for people facing catastrophic increases in interest rates, missed mortgage payments, and tougher qualification standards that make refinancing impossible for thousands of existing home owners. If you are a mortgage payer facing any or all of the above, then this year pull together a plan to save your home from foreclosure.

According to Kathleen Rieger, President of Second Opinion Solutions Group and editor of Credit Rejuvenation a self-help debt reduction website and newsletter, "People who are having problems qualifying for loans are not always people who have over-extended their credit card debt. 80% of the people I talk to have financial hardships brought on by life events like extraordinary health care costs, corporate downsizing and natural disasters. All of these conditions cause people to lose jobs, income and finally, their homes. Too often people turn to bankruptcy when they can't make payments. What they fail to appreciate is the impact bankruptcy has on their credit history. It's far better to arm yourself with options instead of falling into 10 years of credit rejection."

Familiarize yourself with these foreclosure options that can save your home or minimize the impact to your credit history.

Short Sale
A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. In other words, if you can come up with enough money to satisfy the lender, they may settle for less that the full amount of the loan. For the lender, having $50K in the hand is far better than having an empty home that is depreciating daily and for which they have to pay property taxes.

Short Refinance

In a short refinance, the lender may agree to forgive some part of your debt and refinance the remaining debt into an entirely new loan.

Special Forbearance

A forbearance is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage. The borrower agrees to a mortgage plan that, over time, brings the loan current. A forbearance agreement is short-term solution for delinquent borrowers. It is designed for borrowers who have temporary financial conditions, like temporary unemployment or health problems.

Mortgage Modification

A mortgage modification is a modification to an existing loan made by a lender in response to a borrower's long-term inability to repay the loan. A lender chooses to modify the loan because the cost of doing so is less than the cost of default. Loan modifications involve some combination of:

  •     reducing the interest rate
  •     extending the length of the loan term
  •     a different type of loan

Partial Claim

The U.S. Department of Housing and Urban Development uses FHA Insurance to generate a one-time payment to your lender which brings your loan current. You may qualify if:

  •     your loan is at least 4 months delinquent but no more than 12 months delinquent;
  •     you are able to begin making full mortgage payments.

You must execute a promissory note. A lien will be placed on your property until the promissory note is paid in full. The promissory note is interest-free and is due when you pay off the first mortgage or when you sell the property.

Pre-Foreclosure Sale

This option is for owners who don't care to save the property, or who have no other choice than to let the property go. If you have enough equity in the house to allow you to pay off the mortgage in full, then a sale is usually your best option. This option preserves your equity and what's left of your credit score.

Deed In Lieu of Foreclosure

This option is for a borrower who wants to avoid foreclosure and deeds the property back to the lender in exchange for the release of all obligations under the mortgage. Both sides must enter into the agreement voluntarily and in good faith. This won't save your house, but it is not as damaging to your credit rating as a foreclosure.

About Second Opinion Solutions Group, LLC

Second Opinion Solutions Group, LLC, is a company devoted to helping people handle legal and financial hardships with free or low-cost debt reduction tools and professional credit consulting services. Kathleen Rieger, President, is a member of the International Association of Privacy Professional. Kathleen invites you to enroll in the free Credit Rejuvenation mini-course and newsletter at http://www.extreme-debt-makeover.com/kentucky-credit-repair.html.

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Kathleen Rieger
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