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Is foreclosure this couple's only option?

March 8, 2013
By SYLVIA HELDRETH - Real Estate Law , Cape Coral Daily Breeze

Question: My husband and I now understand the meaning of "like a deer in headlights." I lost my job last year and he lost his last month. Now we are behind in paying everything, including our mortgage. The good news is that my husband may have a new job that begins next month. Is foreclosure our only option?

Answer: Some real estate owners who have exhausted savings and don't have a rich uncle to help have chosen foreclosure as the easiest way to avoid being hit by those headlights. Many others have taken the time to investigate their options and have developed a strategy to save their homes. Consider evaluating your options to identify and implement your own strategy. You might begin by asking you lender for a loan modification.

The success of receiving a modification depends on many factors and variables unique to each loan. Your assets, the value of the property, your loan replacement history and even the policies and attitude of the lender will depend on your chances of success.

The modification can range from a simple forbearance, putting legal action "on hold," to a reduction of the outstanding loan balance. The end result is to modify the terms of the loan so that you can afford the new payments, remain in your home and avoid a foreclosure.

Short-pay is a process that involves refinancing your property based on the lower current value. You could try to negotiate with your current mortgage lender to release its lien by satisfying the loan with the proceeds from the re-finance. This plan is only an option if you can qualify for a new mortgage as the re-financing is the key to the payoff of the existing mortgage lender.

If you think you could sell your property and don't want to remain in your home, consider a short sale. The sales price would probably be less than the amount owed to the bank but the bank may be willing to take less in order to recapture some of its capital immediately without resorting to a foreclosure sale. This process can be very time consuming and stressful but has advantages, particularly to your credit rating,

In any case, consider discussing your situation with an attorney who is familiar with the options available in today's challenging times. Foreclosure is not the only option, especially now that your husband may have a new position, but there are many factors to consider before picking the one that suits you best.

Attorney Sylvia Heldreth is a certified specialist in real estate law. Her office is located at 1215 Miramar St., in Cape Coral.

This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.



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