Partial Claim – this enables the funds to be advanced to the homeowner, a type of promissory note. This is only agreed upon as long as your payments are not behind over 12 months, this option could be granted by HUD as a partial amount, what this means is that your mortgage payments would be brought up to date. Essentially it is what you would call a second mortgage, which goes behind your initial mortgage, interest is not collected, and won’t be due until you sell your home or you pay off your first mortgage.
Pre-foreclosure Sale – this is very much like a short sale, it will help you to avoid foreclosure, however, you will have to sell your home, and it is likely that it will sell for much less than it is truly worth. Another thing it will affect is your credit.
The final option available to you is:
Deed in Lieu of Foreclosure – this will enable you to sell your home to the bank that lent you the mortgage in the first place. This course of action will enable you to avoid foreclosure on your home, but again you will end up losing your home in the process.
This course of action is voluntary, and both parties have to act in what is called good faith. The bank has to purchase the property at the market value at least, and the only time that the agreement will not go ahead is if the value of the property exceeds the lien that exists.
Avoid Foreclosure and get a loan modification with lower payments.
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