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Nine Options When Facing Foreclosure

  • 1 DO NOTHING
    If you do nothing, you will most likely lose your home at a foreclosure auction. Loan applications generally ask if you have ever been foreclosed upon. Credit reports also disclose this damaging information. Usually not the best option.
  • 2 PAYOFF/REFINANCE
    Completely paying off your loan amount plus any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.
  • 3 REINSTATEMENT
    Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.
  • 4 LOAN MODIFICATION
    Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow you to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment.
  • 5 FORBEARANCE
    Lender may be able to arrange a repayment plan based on your financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.
  • 6 PARTIAL CLAIM
    A loan from the lender for a 2nd loan to include back payments, costs, and fees.
  • 7 DEED-IN-LIEU OF FORECLOSURE
    Give the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained. Most loan applications will ask if you have ever had a Deed-in-Lieu of Foreclosure.
  • 8 BANKRUPTCY
    This option can liquidate debt and/or allow more time. We will refer you to a qualified bankruptcy attorney upon request.
    • Chapter 7 (Liquidation) To completely settle personal debt
    • Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years
    • Chapter 11 (Business Reorganization) A business debt solution
  • 9 SALE
    If the property has equity (money left over after all loans and monetary encumbrances are paid). You may sell the home without lender approval through a conventional home sale. In this case, you will receive cash from the sale. On the other hand, a Short Sale may be negotiated with your lender if you owe more than the property is worth.
  • 1 DO NOTHING
    If you do nothing, you will most likely lose your home at a foreclosure auction. Loan applications generally ask if you have ever been foreclosed upon. Credit reports also disclose this damaging information. Usually not the best option.
  • 2 PAYOFF/REFINANCE
    Completely paying off your loan amount plus any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.
  • 3 REINSTATEMENT
    Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.
  • 4 LOAN MODIFICATION
    Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow you to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment.
  • 5 FORBEARANCE
    Lender may be able to arrange a repayment plan based on your financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.
  • 6 PARTIAL CLAIM
    A loan from the lender for a 2nd loan to include back payments, costs, and fees.
  • 7 DEED-IN-LIEU OF FORECLOSURE
    Give the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained. Most loan applications will ask if you have ever had a Deed-in-Lieu of Foreclosure.
  • 8 BANKRUPTCY
    This option can liquidate debt and/or allow more time. We will refer you to a qualified bankruptcy attorney upon request.
    • Chapter 7 (Liquidation) To completely settle personal debt
    • Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years
    • Chapter 11 (Business Reorganization) A business debt solution
  • 9 SALE
    If the property has equity (money left over after all loans and monetary encumbrances are paid). You may sell the home without lender approval through a conventional home sale. In this case, you will receive cash from the sale. On the other hand, a Short Sale may be negotiated with your lender if you owe more than the property is worth.
foreclosure

Alternatives to FORECLOSURE

What are your options when facing foreclosure? Try to look at the situation more from a financial standpoint rather than an emotional standpoint. Try to analyze which option might best suit your needs and desires to move you towards resolving your financial difficulty. Though time is of the essence, you should carefully evaluate all your options before making a decision. Once you decide, you must act quickly to make sure you have enough time to complete the solution you choose. Many lenders require you to decide 21 days before your foreclosure date.

Top-Level Expert in Complex Real Estate and Mortgage Matters

Home Advocate Services

Wade Wright is the founder of Home Advocate Services. He is a licensed real estate broker with over 30 years of experience. He has successfully helped over 1,100 customers with their real estate needs since 1988. Wade takes great satisfaction in educating the consumer with their options and helping them navigate through difficult real estate decisions.  Wade has experienced three downturn cycles and during these years he has specialized in distressed sales, while teaming up with top experts in their fields of taxation, law, and lending practices, to help homeowners either keep their homes and investments or to negotiate an equitable sale by avoiding taxation and legal issues.

Always in pursuit of fine-tuning his skills, Wade has taken numerous courses from many distinguished professionals and colleges. In addition to his ongoing education, he has received a Bachelor of Science in Business Administration from California State University, Los Angeles, listed on the National Dean’s list with honors and an Associate of Science degree at Cypress College. Wade was also inducted into the Global Directory of “Who’s Who in Real Estate Top Professionals.”

Professional Affiliations:
National Association of Realtors; California Association of Realtors;
Real Estate Investment Association of California, National Council of Exchangers, Orange County Association of Realtors – Selected as Grievance and Professional Standards Committee Member; Creative Marketing Association Served as Vice-President and on Board of Directors; Letup International Vice-President; National Commonwealth Institute.

Awards:
Five Star Professional; 2011–2021. The Five Star Real Estate Professional is a select group of agents, who represent less than 2% of all real estate agents in the area. Every year, Orange Coast Magazine conducts a survey of 18,800 homeowners and 250 mortgage and title companies throughout Southern California. Those who participated in the research provided the name of a real estate agent and rated that individual according to criteria such as experience, integrity, communication, and customer service. The survey data was collected and scored, resulting in the list of Five Star Agents.

Professional Designations:
ABR Accredited Buyer’s Representative), CCIPS (Certified
Commercial Investment Property Specialist), CMHS (Certified Military Housing Specialist), CREN (Certified Real Estate Negotiator), CRS (Certified Residential Specialist), e-Pro (Electronic Marketing Professional), Exchange Counselor, GRI (Graduate Realtors Institute), REO Trans Distressed Property/Bank-Owned Platinum Certification, and SRES (Senior Residential Specialist).