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**Facing Foreclosure? You Have Options**

In today’s challenging times, many homeowners are faced with difficult decisions about their homes. If you’re struggling to make mortgage payments, foreclosure might seem like the only solution—but it’s important to know that there are other paths available that may better protect your future.

Foreclosure can have long-lasting impacts on your credit and financial well-being. Here's what you should know:

1. **Credit Impact**: A foreclosure can cause a significant drop in your credit score—sometimes by over 300 points—which may affect your ability to secure future loans.

2. **Lasting Effect on Credit Report**: Once listed, a foreclosure can be challenging to remove from your credit report, remaining as a long-term mark on your financial history.

3. **Security Clearance**: For those with jobs requiring security clearance, a foreclosure can have potential consequences.

4. **Financial Responsibility**: In some cases, lenders may pursue a deficiency judgment to recover the balance after the sale of the property.

5. **Relocation**: Foreclosure often means relocating, which can impact your family, career, and daily life.

However, it’s essential to explore alternatives like short sales or loan modifications, which can provide more manageable solutions and help you avoid the full impact of foreclosure.

If you're a homeowner who needs to sell but owes more on your home than its current value, a short sale can be an excellent solution. With no out-of-pocket expenses, this option is becoming increasingly attractive for many homeowners. While banks and lenders were once reluctant to approve short sales, market changes have made them far more open to negotiations. Recent shifts in corporate policies and government regulations have also improved the likelihood of getting short sales approved.

**What Is a Short Sale?**

Simply put, a short sale happens when a homeowner owes more on their mortgage than the home's market value. In a short sale, the lender agrees to accept less than the full balance of the mortgage at closing, allowing the property to be sold for less than the total owed.

**Qualifying for a Short Sale**

Homeowners typically need to meet one or more of the following conditions to qualify:

- **Financial Hardship**: You’re facing financial difficulties that make it hard to afford your mortgage payments.

- **Monthly Income Shortfall**: Your income doesn’t cover your monthly expenses, meaning you can't or soon won’t be able to afford your mortgage.

- **Insolvency**: You don’t have enough liquid assets to pay off your mortgage.

While this may seem straightforward, the process can be complex. Our team has completed hundreds of short sale and default transactions, and we’re here to put our expertise to work for you. Best of all, there’s no out-of-pocket cost for our service.

**Why Consider a Short Sale?**

- **Reduce or Eliminate Your Mortgage Debt**: Free yourself from overwhelming mortgage payments.

- **Avoid the Negative Impact of Foreclosure**: A short sale is less damaging to your credit than a foreclosure.

- **Potential Relocation Assistance**: You may be eligible for relocation assistance, ranging from $1,500 to $15,000, depending on the lender and circumstances.

- **Repair Your Credit Sooner**: Begin rebuilding your credit more quickly than if you go through foreclosure.

- **Future Homeownership Opportunities**: You may be eligible for a Fannie Mae mortgage to purchase a new home in as little as two years, compared to up to seven years after foreclosure.

If you think you may qualify for a short sale or have questions, don’t hesitate to reach out for a free consultation. Understanding your options now could make all the difference for your future.

A loan modification is an agreement between you and your mortgage company to change the terms of your mortgage to make your payments more affordable. This could involve adjusting the payment amount, extending the length of your loan, or changing the interest rate. The goal is to lower your monthly payment so you can keep up with your mortgage.

A Loan Modification Might Be Right for You If:

• You’re not eligible to refinance your loan.
• You’re facing long-term financial hardship.
• You’re behind on your mortgage payments or likely to fall behind soon.

How Does a Loan Modification Work?

A loan modification typically includes one or more of the following changes:

• Changing the loan type: For example, switching from an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate Mortgage for more predictable payments.
• Extending the loan term: Extending the loan from, say, 30 years to 40 years to lower the monthly payments.
• Reducing the interest rate: This can be either a temporary or permanent reduction to help lower your payments.
• Adding past-due amounts to the loan balance: Any missed payments, interest, or escrow amounts may be added to the unpaid principal balance and spread out over the new loan term.

How to Get Started

To begin the process, here’s what you’ll need:

• Financial Information: Gather your mortgage statements, details about any second mortgages, other monthly debt payments (like car loans or credit cards), and your income details (such as paystubs and tax returns).
• Explain Your Situation: Be prepared to explain your financial hardship—why you’re struggling to make payments, and whether it’s a short-term or long-term issue. This helps your mortgage company find the right solution for you.
• Contact Your Mortgage Company: Let them know you’re interested in a loan modification and ask if you qualify.

For further assistance, you can reach out to us, or connect with a qualified housing counselor through the Making Home Affordable program.

Contact us today to get started!