Once you have begun the loan modification process or listed your home for short sale will your bank continue with the foreclosure process? How much time do you have before the hammer falls and your home is lost? Struggling homeowners trying to decide the best course of action need some real answers and need to understand all the possible options so they can avoid foreclosure. There are some standard procedures that need to be followed when facing this type of situation, and so it is critical to proceed carefully.
There are two federal programs designed to help borrowers with unaffordable mortgage payments. Both of these are funded by the stimulus plan that President Obama initiated over 2 years ago. The first option is a loan modification and is aimed at keeping borrowers in their home by providing modified loan terms that are more affordable. This plan is called HAMP and over 90% of lenders and servicers are participating. Homeowners must be able to meet the standard guidelines for approval in order to qualify, and their monthly income, monthly expenses and cash in the bank will all be reviewed carefully for eligibility. Most borrowers are turned down for a loan modification simply because they do not know or understand how to prepare their application correctly.
We recommend using a loan mod software program that mimics the federal guidelines to show you how to prepare your financial statement. When you input your own specific financial information, the loan mod software program shows you exactly where you may need to fine tune your figures in order to pass the approval guidelines. The best selling resource for homeowners is a great help to understand how to qualify, The Complete Loan Modification Guide kit.
Will your bank foreclose while you are going through the loan modification process? Well, technically they are supposed to forestall any sale of your property until a final decision is made on whether you qualify or not. The federal program states that every homeowner who requests consideration for HAMP must be reviewed and the foreclosure process will be halted during this review. However, the clock is still ticking and if it turns out that you do not prove you meet the eligibility guidelines, then your home can be moved quickly to foreclosure. That is why it is critical to understand exactly what your lender needs to see on your loan modification application so you can fill it out correctly.
What about a foreclosure during the short sale process? Once your home is listed by an experienced real estate agent, you should get an offer right away so that the entire package can be submitted to the short sale department at your bank. Once they have a pending offer in their system, the foreclosure process and even a sale date will be postponed while the transaction is under review. Keep in mind that if you have a sale date already pending, time is of the essence. Some lenders will not allow a short sale if there is not at least 2 weeks prior to the pending sale date.
2 Smart Cookies Real Estate know and understand all the federal programs, can help you determine what programs you may be eligible for and will walk you through these difficult decisions every step of the way. It is critical to act quickly and be able to make an informed decision to avoid foreclosure.