How To Avoid Foreclosure For Albuquerque Home Owners
The current real estate crises has had a negative impact on Albuquerque, Rio Rancho, Corrales, Bernalillo County, Sandoval County, and Valencia County Homes. The the national financial crisis has caused stress and heartache for many New Mexico families. Foreclosure is a devastating financial challenge for New Mexico families and one that may be avoided. Options available how to avoid foreclosure for Albuquerque home ownersÂ are many. A brief explanation of how to avoind foreclosure for Albuquerque owners is listed below, including their benefits and concerns:
Forbearance or repayment plan is one way how to avoid foreclosure and involves the home owners negotiating with the mortgage company to allow the Albuquerque home owner to repay missed payments over a period of time. Typically home owners will make their current mortgage payment and an additional payment of a portion of the missed payments they owe their mortgage company. New Mexico home owners need to call their mortgage company and attempt to negotiate a payment plan that that the home owner can afford and the mortgage company will accept. New Mexico home owners need to understand how the additional payment will be handled by the mortgage company. It is critical to stay current on your payments if you are successful in negotiating a repayment plan.
- Benefit: Allows New Mexico home owners to avoid a foreclosure, keep their homes, and make back payments over time.
- Concern: Requires New Mexico home owners has the ability to pay not only their current mortgage, but also a portion of the missed payments owed. Mortgage companies may require home owners to meet certain criteria for a repayment plan.
A reinstatement is the simplest solution on how to avoid a foreclosure. However it is often the most difficult. Home owners requests the total amount owed to the mortgage company to date and makes a payment in full. This solution does not require the mortgage company”s approval and will reinstate a mortgage up to the day before the final foreclosure sale.
- Benefit: Does not require approval by the mortgage company.
- Concern: New Mexico home owners must be able to pay all missed payments, fines, penalties, and associated fees.
Refinance is another method how to avoid foreclosure for New Mexico home owners with sufficient equity in their property and still have good credit may be able to refinance their mortgage.
- Benefit: This may lower your mortgage payments and may be a good option for New Mexico home owners with Adjustable Rate Mortgages.
- Concern: Home owners must have adequate credit in order to meet the mortgage company requirements for a refinance.
Mortgage modification involves the reduction of one of the following: the principal balance of the mortgage, the interest rate on the mortgage, the length of the mortgage, or a combination of these. A mortgage modification is difficult means on how to avoid foreclosure for Albuquerque homeowners. This is a great plan if the bank agrees to a loan modification.
Benefit: Reduces the monthly mortgage payment of New Mexico home owners and may reduce the principal balance of the mortgage.
- Concern: Mortgage Company must be actively pursuing mortgage modifications. Requires that home owners qualify for the new mortgage payment and will often require full documentation.
Rent the Property
New Mexico home owners can rent their home and use the rental income to make the mortgage payments; you will need to make up the missed mortgage payments, fees, and penalties. This may be a great option how to avoid foreclosure for Albuquerque home owners.
- Benefit: Allows home owners to keep property and enjoy the tax benefits a rental may provide.
- Concern: There are many issues that may arise with owning a rental house.
Sell the Property
New Mexico home owners with sufficient equity in their homes can list their home with a qualified real estate broker that understands the foreclosure process in their area. This may be a great option how to avoid foreclosure for Albuquerque home owners.
- Benefit: Home owners will keep some of their equity and avoid a foreclosure.
- Concern: Home owners may not have sufficient equity to sell their property and cover all normal closing costs without negotiating a short sale.
Deed In Lieu Of Foreclosure
Deed in lieu of foreclosure allows New Mexico home owners to return the property to the mortgage company and avoid the foreclosure process, this is also known as a friendly foreclosure. Mortgage company approval is required for this option and the home owners homes must also vacate the property. The mortgage company may require home owners to attempt to sale your house with a licensed Real Estate Professional.Â This may be a great option how to avoid foreclosure for Albuquerque home owners.
- Benefit: Many times in a successful deed in lieu, the mortgage company will agree to release home owners from a deficiency judgment.
- Concern: Requires that owners of Albuquerque homes and Rio Rancho homes vacate the home and a deed in lieu may be reported to credit bureaus as a foreclosure.
Service Members Civil Relief Act
Active members of the military experiencing financial distress due to deployment, and that person can show their debt was entered into prior to deployment may qualify for relief under the Service Members Civil Relief Act. Service Members can contact the American Bar Association to tap into the network of attorneys willing to perform these services. This may be a great option how to avoid foreclosure for Albuquerque home owners.
- Benefit: If qualified, this will lower mortgage payments and payments on all consumer debt.
- Concern: Home owners must be active military to qualify.
Many have considered and marketed bankruptcy as a solution to foreclosure, this is only true in some states and situations. If New Mexico home owners have non-mortgage debts that cause a shortfall of paying their mortgage payments, a personal bankruptcy will eliminate these debts. Owners of New Mexico homes should consult a bankruptcy attorney to discuss this alternative to understand if bankruptcy is their best option. This may be a great option how to avoid foreclosure for Albuquerque home owners.
- Benefit: Does not require mortgage company approval.
- Concern: If owners of New Mexico homes cannot afford their mortgage payment, a bankruptcy will only stall the foreclosure process and most likely will not stop the foreclosure. Bankruptcy is damaging to credit scores and can only be declared once every seven years.
New Mexico home owners that owe more on their primary residence than their home is currently worth can hire a qualified real estate broker to market and sell their property through the negotiation of a short sale with their mortgage company. This typically requires the property to be on the market and the New Mexico home owner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of home owners between the date of the purchase and the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, divorce, excessive debt, job loss, forced or unplanned relocation, and more. This may be a great option how to avoid foreclosure for Albuquerque home owners.
- Benefit: A short sale allows home owners to salvage some of their credit rating and avoid foreclosure. This also keeps foreclosure off the New Mexico home owner’s or public record. In many cases will allow the home owners to avoid a deficiency judgment. Home owners may qualify for another mortgage in as little as 24 months as opposed to five years for a foreclosure.
- Concern: Short sales are a difficult process in which NM home owners are best served by contracting with a qualified real estate broker to guide the way.
This represents only a summary of some of the solutions available how to avoid foreclosure for Albuquerque home owners. Contact John Myers today for a free confidential evaluation of your individual situation, property value, and potential options. I will help you on how to avoid foreclosure.
I am proud to have earned the prestigious Certified Distressed Property Expert® (CDPE) Designation.Â I have completed extensive training in how to avoid foreclosure withÂ an emphasis on short sales. As a CDPE, I have been educated on how to avoid foreclosure for distressed owners of Albuquerque homes. The knowledge obtained by being a CDPE is invaluable in educating and assisting New Mexico home owners how to avoid foreclosure.
FREQUENTLY ASKED QUESTIONS
What is a Mortgage or Loan Modification?
This process is one method how to avoid foreclosure and allow home owners to stay in their homes when they can no longer afford their current mortgage. A mortgage or loan modification is a process through which your mortgage company changes any or all of the following:
- Your mortgage interest rate
- Your mortgage principal balance.
- Your mortgage terms (example: from an adjustable to a fixed rate)
Why Would A Mortgage Company Modify My Mortgage?
Mortgage companies have realized that in some cases the best solution is to work with current owners of Albuquerque homes and Rio Rancho home owners to reduce their mortgage payments or possibly improve their mortgage terms in order to keep owners of Albuquerque homes and Rio Ranch homes in their homes. The average foreclosure can cost a mortgage company from 30-50% of the value of a property; keeping owners of Albuquerque homes and owners of Rio Rancho homes in their homes may be the best option for everyone.
What Do I Need To Qualify For A Mortgage Or Loan Modification?
According to the Making Home Affordable Web site, New Mexico home owners will need the following information for your mortgage company to consider a mortgage or loan modification:
- Gross monthly gross (before taxes) income of your household, including recent pay stubs or documentation of income you receive from other sources
- First mortgage information, such as your monthly mortgage statement
- Second mortgage information or home equity line of credit on the house
- Account balances and minimum monthly payments due on all of your credit cards
- Account balances and monthly payments on all your other debts such as student loans and car loans
- Your most recent two years income tax return
- Information about your savings and other assets
It may also be helpful to have a letter describing any circumstances that caused a reduction in your income such as job loss, reduction in salary, divorce, family illness, etc. or an increase in your expenses such as increase in mortgage payments, medical payments, etc.
Do I Qualify For A Mortgage Or Loan Modification?
The first call you make should be to your mortgage company. Have the information above ready to discuss with them and call your customer service line to ask them what options you have available on how to avoid foreclosure. It may take multiple phone calls to get in contact with the right person at your mortgage company, be persistent. If the person you speak with does not understand what you are asking, you can ask to be referred to their supervisor or one of the following departments:
- Loss Mitigation
- Mortgage or Loan Modification
Go to the Making Home Affordable web site prior to contacting your mortgage company, owners of Albuquerque homes or owners or Rio Rancho homes can quickly complete an on line eligibility test. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP). For a list of mortgage companies and servicers, visit the Hope Now web site.
What Is A Home Affordable Refinance?
You may be eligible for a Home Affordable Refinance if Freddie Mac or Fannie Mae owns your mortgage. This will allow you to refinance your home and often lower your payments. This may be a good option for those trapped in a high interest rate mortgage.
Do I Quality For A Home Affordable Refinance?
According to the resources released by the federal government, the following are a list of qualifications:
- You are the owner occupant of a one- to four-unit home
- The loan on your property is owned or securitized by Fannie Mae or Freddie Mac
- At the time you apply, you are current on your mortgage payments (you haven’t been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)
- You believe that the amount you owe on your first mortgage is about the same or slightly less than the current market value of your house
I Don’t Qualify For A Mortgage Modification, Can’t Afford My Home, And Owe More Than It’s Worth, What Can I Do?
Many owners of Albuquerque homes and owners of Rio Rancho homes in this situation and foreclosure is not the only option. If your Mortgage Company or servicer will not work with you to reduce your payment, you may want to consider a short sale. John Myers with the Certified Distressed Property Expert® Designation has undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Contact John Myers for help in dealing with this important decision.
Do I Qualify For A Short Sale?
The qualifications for a short sale include any or all of the following:
- Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
- Monthly Income Shortfall Your Mortgage Company will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- Insolvency – The mortgage company will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.