Foreclosure threatening your credit score? Your mortgage problems don't have to bring down everything you've worked for.

If your mortgage payments have become unaffordable, or you’ve recently taken a financial hit that will affect your ability to pay the mortgage, you probably have a lot on your mind. Your next financial moves will affect you for many years to come, so having a solid, informed plan can save you a lot of stress in the near and distant future.

Anyone who is facing foreclosure should understand exactly what its implications are, and what other options are available. If you are behind on mortgage payments and do not see a way to catch up, avoiding foreclosure can help you recover your finances more quickly. Short sales and deeds-in-lieu are two dignified alternatives that more and more homeowners are using to avoid the financial impact of foreclosure.

One incredibly important benefit of these foreclosure alternatives is their lesser impact on your credit score. “I have personally seen a short sale only lower credit scores by as little as 50 points, as opposed to the 250 to 300 point drop from a foreclosure,” said Alex Charfen, CEO of the Distressed Property Institute. Additionally, the credit effects of a short sale can be as brief as 12 to 18 months, whereas a foreclosure will typically impact your credit score for more than three years.

In today’s economy, banks and lenders are forced by market competition to make increasingly quick lending decisions, which means they must rely more heavily on credit scores to decide whether you will be approved for a loan, how much of a down payment will be required, what your interest rates will be, etc. Whether you eventually intend to buy a car or house, take out a loan or use a credit card, minimizing the damage to your credit score through a foreclosure alternative can benefit you in the long run.

Just because your current house is unaffordable doesn’t mean you should forget the idea of owning an affordable house in the near future. However, this possibility will hinge heavily on how you deal with your current mortgage.

A short sale is not specifically reported on credit histories. Foreclosure is reported for at least 10 years, which means that when future employers check your credit history, they will see the foreclosure as a negative on your report.

Beyond the credit benefits of a short sale, it is important to know that you may be eligible for $3,000 in borrower relocation assistance from the HAFA Program to complete a short sale or deed-in-lieu, which could help with moving costs and a more smooth transition into your future dwelling.


As you can see, a short sale may allow you to sidestep some of the damaging effects of foreclosure. There are multiple factors that influence your credit score, a crucial one being timely payments of your most recent bills. This means that if you can no longer afford your mortgage, it is important to act quickly. By successfully completing a short sale or deed-in-lieu, your credit score may be less damaged than in a foreclosure, which would allow you to recover more quickly and move on with your life. For that reason alone, you deserve to find out if a short sale will work for your situation.


Contact me today so that we can assess your situation and figure out your best possible options. As a CDPE-designated agent, I have been extensively trained in the full range of foreclosure alternatives for distressed homeowners, and I’m ready to help you get started on a path to a more stable tomorrow. 
 
From Distressed Property Institute, LLC

What is a Short Sale? What is a Deed-in-Lieu? Do You Qualify for a short sale?

A short sale is when the lender agrees for the property to be sold at a price lower than the mortgage balance owed.

A deed-in-lieu is when the lender receives the house deed in place of the mortgage balance, although in some cases the lender will still pursue the homeowner for the leftover mortgage balance, which is called a deficiency judgment. A HAFA short sale or deed-inlieu prohibits the participating lender from pursuing a deficiency judgment.

Do You Qualify For A Short Sale?

Do you have .....

1. Financial Hardship: severe illness, military service, insurance or tax increase, etc. (Ask me for full list of acceptable hardships)
2. Monthly Shortfall: business failure, job loss, wage reduction, divorse, etc.
3. Insolvency; you currently ower more money than you have, or you are about to reach that point.

If these three items define you, it means you may qualify for a short sale.  The financial implications of short sales, whether HAFA short sales or not, are always less severe than the implications of foreclosure.  Your credit score, credit history, employment applications, and future chances of acquiring a loan all benefit from completing a short sale rather than being foreclosed upon. 

Find out more at http://www.abqdistressedhomeowners.com/

There are dignified solutions to foreclosure

A lot of today’s struggling homeowners made all the right moves. They took a reasonable loan for an affordable mortgage, and were then hit by the unexpected: their employer cut benefits or laid them off due to the constricting economy; a surprise expense changed their budget plans; their financial investments took  a turn for the worse; the list goes on.

These kinds of homeowner situations aren’t usually the ones we hear about, but they are everywhere. That’s why I am sharing the news with you about options that are available to distressed homeowners.


With the new Home Affordable Foreclosure Alternatives Program, or HAFA, you may be eligible for a $3,000 incentive to avoid foreclosure by pursuing a short sale or deed-in-lieu.

The first part of assessing someone’s current mortgage situation involves seeing whether they can modify their loan and lower payments to an affordable level. This route does work for some, but an important thing to understand is that mortgage modifications almost never lower the principle amount owed on the loan, only the interest.
 
This means that a mortgage modification will only help those homeowners who are just out of reach of making their payments, which is unfortunately not the case for most distressed homeowners. With a financial hardship as impactful as a job loss or a major drop in financial assets, tweaking the interest rate on your loan is usually not enough to make the mortgage affordable.


If we find that you are in a situation that would benefit from a mortgage modification, I can show you the best way to pursue this route. If not, then a short sale may be your best option, and HAFA makes that option even more appealing.

In addition to offering the $3,000 incentive for a successful short sale, hafa holds the lender to a set timeline so that the transaction doesn’t drag out unnecessarily. This lessens the chance of being foreclosed upon in the middle of the short sale process.

A select few lenders and mortgage servicers may not participate in the hafa program. But despite this, a lender almost always loses more money in a foreclosure than in a short sale or deed-in-lieu. If a lender is convinced that a homeowner has no way of paying the current mortgage, they will be concerned with salvaging as much of their investment as possible, so short sales are generally the best option for them as well.


If your lender is participating in HAFA, there is a set of criteria you must meet to be eligible for the program. To find out your eligibility and lender’s participation, please contact me.

As a CDPE-designated agent, I have been trained in the full range of options available to distressed homeowners. I can assess your situation, help you figure out your best options and help you move towards a solution.

I have invested myself in helping homeowners who are struggling with mortgage payments because I understand the unusually challenging times we are in, and I’m ready to help as many people as I possibly can.