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STOP YOUR FORECLOSURE SALE (TRUSTEE SALE)
The news is full of stories of banks wrongfully foreclosing on homeowners. Mortgage Lenders and Trustees have laws and procedures they must follow to validly foreclose and take someone’s home. Yet everyday homes are improperly and illegally foreclosed upon.
Lenders use “trustees” to assist them in a foreclosure. Called a Trustee Sale, trustees, acting for the lender, sends out a Notice of Default and later a Notice of Trustee Sale and eventually sells the home at auction. Either the bank takes the home back in their inventory or the home is sold to the highest bidder at the auction. The homeowner just lost their home.
However, trustees can be held liable for improperly foreclosing upon a home. Trustees do not want to be held liable for wrongful foreclosure. Trustees will not foreclose on the property if there is a potential violation pointed out to them prior to the Foreclosure Auction Sale Date. Trustees are incredibly busy and generating huge profits so they will do whatever it takes.
A loan modification is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment. With a loan modification, the lender may agree to do one of more of the following to reduce your monthly payment:
reduce the interest rate
convert from a variable interest rate to a fixed interest rate, or
extend of the length of the term of the loan.
Generally, to be eligible for a loan modification, you must:
show that you cannot make your current mortgage payment due to a financial hardship
complete a trial period to demonstrate you can afford the new monthly amount, and
provide all required documentation to the lender for evaluation.
Required documentation will likely include:
a financial statement
proof of income
most recent tax returns
bank statements, and
a hardship letter.
There are many different loan modification programs available, including proprietary (in-house) loan modifications, as well as the Home Affordable Modification Program (HAMP), which is part of the federal government’s Making Home Affordable initiative. HAMP assists borrowers by modifying their first lien mortgages so that the monthly payments are lower and more affordable. To learn more about HAMP, seeThe Home Affordable Modification Program (HAMP). (To find out about other government programs for struggling homeowners, see our Government Foreclosure Prevention Programs topic area.)
If you are currently unable to afford your mortgage payment, and won’t be able to in the near future, a loan modification may be the ideal option to help you avoid foreclosure.
While a loan modification agreement is a permanent solution to unaffordable monthly payments, a forbearance agreement provides short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period of time and not to initiate a foreclosure during the forbearance period. In exchange, the borrower must resume the full payment at the end of the forbearance period, plus pay an additional amount to get current on the missed payments, including principal, interest, taxes, and insurance. (The specific terms of a forbearance agreement will vary from lender to lender.)
If a temporary hardship causes you to fall behind in your mortgage payments, a forbearance agreement may allow you to avoid foreclosure until your situation gets better. In some cases, the lender may be able to extend the forbearance period if your hardship is not resolved by the end of the forbearance period to accommodate your situation.
In forbearance agreement, unlike a repayment plan, the lender agrees in advance for you to miss or reduce your payments for a set period of time.
If you’ve missed some of your mortgage payments due to a temporary hardship, a repayment plan may provide a way to catch up once your finances are back in order. A repayment plan is an agreement to spread the past due amount over a specific period of time.
Here’s how a repayment plan works:
The lender spreads your overdue amount over a certain number of months.
During the repayment period, a portion of the overdue amount is added to each of your regular mortgage payments.
At the end of the repayment period, you will be current on your mortgage payments and resume paying your normal monthly payment amount.
This option lets you pay off the delinquency over a period of time. The length of a repayment plan will vary depending on the amount past due and on how much you can afford to pay each month, among other things. A three- to six-month repayment period is typical.
A real estate short sale is any sale of real estate that generates proceeds that are less than the amount owed on the property. A real estate short sale occurs when the lender and borrower decide that selling the property and absorbing a moderate loss is preferable to having the borrower default on the loan.
To get information about these and other options to avoid foreclosure, please see
and contact us before its too late.
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The Vision Group Real Estate Services
17138 Bellflower Blvd Suite 200
Bellflower, CA 90706
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