Alternative To Foreclosure When Cannot Afford Mortgage

This BLOG On Alternative To Foreclosure When Cannot Afford Mortgage Was UPDATED On February 21st, 2019

The real estate and credit collapse of 2008 has sky rocketed bankruptcy filings and foreclosure rates like never before in history.

  • There were complete industries that got completely eliminated
  • Real Estate Investors with strip malls with high property taxes got hurt big time
  • Technology was a major factor of the downturn as well
  • Large franchises like Blockbuster Video went out of business
  • Many did not have to report to work and companies created countless remote job positions where they could work from home
  • Many out of retirement were forced back to the workforce
  • Many hard-working Americans with high earning positions had to settle with jobs and/or businesses with a substantial income reduction
  • Many folks with stellar credit had their credit deteriorate due to not being able to meet their monthly debt obligations
  • McMansions were popular but many could no longer afford their homes
  • The Great Recession of 2008 was the longest Recession in U.S. History

Dream Of Home Ownership

Will I ever have my dream home?

The dream of home ownership is the number one dream for all Americans in the U.S.

  • Many feared by foreclosing on their homes or filing bankruptcy that they could no longer become homeowners again in their lifetime
  • However, home buyers can qualify for mortgage loans after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale
  • Gustan Cho Associates at Loan Cabin is a direct lender with no overlays on government and conventional loans

The Gustan Cho Team at Loan Cabin Inc. is also correspondent lenders on non-qm loans and bank statement loans for self-employed borrowers.

NON-QM Loans Require No Waiting Period After Bankruptcy And Foreclosure

Home buyers can qualify for non-qm loans with no waiting period after the following:

  • Foreclosure
  • Deed In Lieu Of Foreclosure
  • Short Sale
  • 10% to 20% down payment
  • Amount of down payment required depends on borrowers credit scores

Impact Of The Great Recession Of 2008 Today

Many folks today still have not recovered from the decade old Recession:

  • Foreclosure rates have hit a historical high in late 2011
  • Many Americans have still not recovered by the Great Depression of 2008
  • Although unemployment rates have dropped, statistics show that the unemployment rates are in the double digits
  • The numbers being reported are not actual figures due to millions who have just given up in trying to find employment
  • Many homeowners are still lingering in keeping their home mortgage payments afloat
  • Foreclosure rates are nowhere in sight in tapering off
  • According to a recent study by Realty Trac, foreclosure rates in many states were experiencing increases month after month since August 2012
  • The foreclosure rates do not seem to stabilize
  • Homeowners who cannot mortgage and do not see any light at the end of the tunnel, there are alternative options to foreclosures

With the election of Barack Obama, a community organizer from the South Side of Chicago with no business experience, the country was set for a real hard road to recovery.

Options If You Cannot Afford Mortgage Payments

What options do you have if you cannot afford to pay off your mortgage?

If you cannot afford mortgage payments and need some relief, there are some alternatives and options for you to consider.

  • There are many reasons why homeowners cannot afford mortgage payments
  • It can be due to a job loss or business shutdown
  • It can be due to medical reasons or a nasty divorce
  • Whatever the reason, the first step you should take is to contact the lender
  • There are alternatives to foreclosure and mortgage lender will be best ally in helping you either keep home through a repayment plan or a deed in lieu of foreclosure or short sale
  • The best time to contact the current lender is while you are still current with the mortgage loan payment
  • Do not blatantly not pay mortgage loan payments without contacting the lender
  • Mortgage lender does not want the house
  • Lenders do not want to foreclose on unless absolutely necessary

Refinancing To Lower Your Monthly Payments

Refinancing so you can lower your monthly mortgage payments may be an option.

  • I can now offer an FHA Streamline with no income verification and no credit scores required for borrowers in Illinois, Florida, Wisconsin, California, and Indiana
  • As long as you are employed, the lender will not verify income
  • You can have bad credit and recent late payments but not on the mortgage
  • The only requirement is that you are not late on mortgage payments
  • If you have recently got the FHA loan and you got hours greatly reduced and need to lower payment, you can do an FHA Streamline refinance with no income verification
  • There is a minimum six month seasoning requirement for you to have a FHA Streamline Refinance if you recently purchased home
  • Adjustable mortgage rates offer mortgage rates are substantially lower than the 30 year fixed rate mortgage rates

Loan Modification: Alternative If You Cannot Afford Mortgage

Another option if cannot afford mortgage payments is to request your current mortgage lender if you qualify for a loan modification.

  • A loan modification is when current mortgage loan gets restructured to make the monthly mortgage payments much more affordable
  • The mortgage payments that are in arrears can be added to the back of the loan, the terms can be extended, the mortgage rates can be reduced, and the mortgage balance can be discounted if the home is severely under water

Selling Your Home Regular Way Or Via Short Sale

Which means selling your home on a regular basis or as a short sale

Another alternative if you cannot afford mortgage payments on your house is to consult with a realtor and see what home is worth.

  • You may be surprised by how much your home is worth
  • Real estate prices have been increasing since the Great Recession of 2008 and you might have more equity than you think you have
  • If your home is worth more than your mortgage and you have substantial equity where it will cover your closing costs and still have equity, you might want to list your home with a realtor
  • If the home is worth less than the mortgage balance, then you might want to do a short sale which requires the approval of the current lender
  • A short sale is when you sell a home below the balance of what you owe to the lender
  • Lenders are always willing to entertain a short sale offer
  • This is because it saves them a lot of time, money, and grief over a regular foreclosure
  • If the home needs tons of repairs and may take a lot of time in selling it, you might consider doing a deed in lieu of foreclosure
  • Homeowners turn in the home in return of the lender foreclosing on the home and having the courts issue a deficiency judgment

Reorganize Your Debt By Filing Bankruptcy

If you had a salary decrease due to changing jobs or company budget cuts and that has impacted your income where you have too much debts which is impacting paying mortgage payments, you may want to consider filing bankruptcy.

  • I am not a bankruptcy attorney nor am I qualified to offer bankruptcy advice
  • Filing Chapter 7 bankruptcy and wipe out all debts and still keep your home if you have little or no equity in your home
  • If you have tons of equity in your home and assets and have income, you may want to think about filing a Chapter 13 bankruptcy
  • Chapter 13 Bankruptcy is a restructuring of your debts over a period of time
  • The best thing to do is to consult a bankruptcy attorney to weigh your options

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