There are several ways to AVOID FORECLOSURE!

Your Lender does NOT want to own your house!

Loan Modification or a Repayment Plan.    Sometimes your financial situation is such that you can make it all work out with a restructuring of the terms of your mortgage or a reduction of the interest rate.   Some lenders will entertain these ideas and depending on the variables might be able to help you out.  This is called a “Work-Out” and many lenders have a department called a “Work-Out Department”.

Selling Your Home – Sell your home with a REALTOR®  experienced doing a SHORT-SALES.   A SHORT-SALE simply means that the proceeds (the net) from the sale is less than the amount owed on the mortgage but through skillful negotiation the lender or their representative is willing to accept a lesser amount.   In addition, the Lender pays for the Real Estate Brokerage Fee ,Title Search Fee and Attorney Fees.  The sale of your home could help you to avoid the foreclosure sale of your home.  When you do a SHORT-SALE at the end you no longer have a mortgage.  You DO NOT receive any of the proceeds from the sale unless some moving expense is negotiated.  A SHORT-SALE has the least impact on your credit score.  Some lenders may entertain a “Lease-Back” option so you don’t have to move (this is becoming very rare).

Deed in Lieu of Foreclosure – You agree with the lender to turn the property over to the lender in good condition.   Sometimes there can be a “Cash-For-Keys” which means you get some moving assistance from the lender.  Not all lenders have a “Cash-For-Keys” and the qualifications can vary from lender to lender.

These are just a few of the alternatives to foreclosure.  Your attorney can advise you of others.

Even though you have received a Notice of Foreclosure, also called a “Lis Pendens” which is Latin for Litigation Pending, it’s not too late to take advantage of the above ideas.  The sooner you act the better for your long term financial health and overall sanity.

IF YOU DO NOTHING!

1.        The amount you owe will increase in Florida.   Every month of unpaid interest is added to the unpaid balance of your mortgage.  Late Charges will accrue.  Attorney Fees will be added to the amount you owe.   Foreclosure Costs including court costs will be added.  This will all total to what is called a deficiency and Florida is a State where the deficiency can be held against you and you are liable for that unpaid amount.

2.        Your lender has the right to report any unpaid deficiency to the IRS and they can issue you a 1099 form which will appear on your tax return as regular income raising the amount you owe the IRS in the year you are foreclosed.

3.        Your credit rating is ruined.  Foreclosure has a negative impact on your credit score for 7 to 10 years.   This makes it difficult to get credit for any major purchase or to have decent housing.   If you do buy a used car you would pay the maximum interest rate allowed by the states usury laws.   A foreclosure can haunt you in some way for a very long time.

4.        Pack your bags, you’re moving away!

Our experienced SHORT-SALE team includes REALTORS®, Negotiators and Real Estate Attorneys.   We have a 95% success rate completing these complex transactions.   If you think selling the house and getting out from under the debt with the minimum impact on the rest of your life is the right answer please give us a call or email.  We will evaluate your situation and advise you properly.  Sometimes that advise is to take another course of action and not sell short.