8 Foreclosure Options All Homeowners Should Consider

8 Foreclosure Options All Homeowners Should Consider

 

WARNING: Don’t even think of doing anything with your home until you read this letter. Which one of these options will best help you?

 

Some of these may even affect your ability to get a job.

Why? Many employers now require credit checks before hiring.    

 

Option #1 – Pay the loan current
Considerations:

  1. Borrow money from friends and family
  2. Embarrassing… especially if you can't pay it back
  3. Bad loans… throwing worse money after bad
  4. Just digging a bigger hole


Option #2 – Loan modification
Considerations:

  1. Not guaranteed
  2. May only lower payment slightly
  3. Takes time (Foreclosure clock keeps ticking)
  4. 2 to 4 payments could go by (you'll need to make payments)
  5. Could still lose home
  6. Have to qualify based upon your current financials


Option #3 – File for bankruptcy
Considerations:

  1. Costs money ($3,000 to $4,000)
  2. Unsecured debts get paid off for pennies on the dollar
  3. Secured debts get averaged back in over a period no more than 60 months (Basically it increases your payments)
  4. Add in 10% for the bankruptcy trustee
  5. 95% failure rate because payments are higher
  6. Once you file and fail, all the unpaid interest gets added back in and eats up any possible equity and makes a short sale tougher
  7. Still a 10-year hit on your credit. Not as bad as a foreclosure, but it's a close second.

 

Option #4 – Sell and lease back
Considerations:

  1. Very risky because most investors won't do it
  2. Risky because of chance of default
  3. You will need to come up with a lump sum for security and first deposit (and maybe more)
  4. You'll have to buy in a year and credit may not be there, which means you could lose the house anyway.

 

Option #5 – Selling it on the open market
Considerations:

  1. No equity to negotiate with the buyer
  2. No money to pay even a reduced agent fee
  3. No money to pay transaction fees for state
  4. Bank won't stop foreclosure proceedings while home is on the market
  5. Won't be able to sell it for enough to pay off the bank.

 

Option #6 – Make the bank “produce the note”

 http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/

         

Option #7 – Foreclosure

Considerations:

  1. Worst option
  2. On the hook for the debt
  3. Worst black mark you can have on your credit
  4. 2 years out from getting a bad loan
  5. 5 years out from getting an okay loan
  6. No credit cards
  7. Bad car loans

 

 

Option #8 – Short Sale

Considerations:

  1. Sell your home to a retail buyer
  2. Sell for less than you owe bank
  3. Mortgage Debt Forgiveness Act of 2007 – pay no taxes on the shortage.
  4. Save credit instead of having a huge blemish for 10 years (not 7 like most people think), it's a much shorter term black mark
  5. Once an offer is made the foreclosure process stops

 

 

Click here to have a Short Sale Specialist contact you

WE CAN GIVE YOU FREE, HONEST ADVICE ABOUT YOUR SITUATION.

DON’T WASTE ANY MORE TIME! CONTACT US TODAY AT

901-591-8100

or email us at john@johnquinnrealestate.com

 

 

 

 

Contact Information

Photo of John Quinn Real Estate
John Quinn
RE/MAX Real Estate Experts
1930 Exeter Rd
Germantown TN 38138
901-685-6000
901-591-8100
Fax: 901-685-9090