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Foreclosure Alternatives

short-sale2The following is a list of possible options for homeowners to avoid Metro Phoenix Arizona foreclosure:

  • Short Sale: When homeowners owe more on a property than it is currently worth and one of the following solutions does not apply to their situation, there is the option of pursuing a short sale.
  • Reinstatement: To reinstate a mortgage, the homeowner has to pay all the missed payments, late fees and legal fees that are due up to the date that the loan is reinstated.
  • Forbearance or Repayment Plan: the lender allows the buyer to pay the missed amount over a period of time or the lender places the missed payments on the end of the amortization of the loan.
  • Rent the Property: In some cases, homeowners facing foreclosure will have payments low enough to allow them to rent their property and keep up their mortgage payments.
  • Sell the Property: If sellers have equity in their property, they can sell it and prevent a foreclosure.
  • Refinance: If homeowners have sufficient equity and income and their credit has not been too badly damaged, they may be able to refinance.
  • Mortgage Modification: A loan modification is very similar to a lower interest refinance where the lender lowers the interest rate on the existing loan to lower the payments.
  • Short-refi: This process involves the refinance of a home with a reduction in the principal balance and often the interest rate as well.
  • Deed-in-lieu of Foreclosure: A deed-in-lieu of foreclosure is sometimes referred to as a friendly foreclosre because the homeowner essentially gives the deed back to the bank.
  • Bankruptcy: A bankruptcy may stop a foreclosure and allow homeowners to reorganize their debt and keep their property.
  • Servicemembers Civil Relief Act (SCRA): This law provides certain protection to military personnel who are in foreclosure in specific situations.

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Arizona Real Estate Specialist

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