An Alternative to Foreclosure
If you’re facing a foreclosure on your home, were denied a loan modification, were unable to complete a Bankruptcy or if you are simply ready to move on with your life and relocate, there are still options available for you.
As a response, the Home Affordable Modification Program (HAMP) was introduced in 2009 by the Federal Government, which in conjunction with legal action and later settlement with the five largest banks, finally resulted in the participation and issuance of loan modifications by mortgage lenders.
Additionally, the State of New Jersey created the Foreclosure Mediation Program, which required mortgage lenders to participate. The program also provided HUD counselors to homeowners, free of charge, to assist in the preparation and negotiation of loan modification applications. All of these factors contributed to a substantial increase in the number of loan modifications issued during such period of time.
Unfortunately, the New Jersey Foreclosure Mediation Program was defunded and HAMP expired at the end of 2016.
Short Sales
The most common way of addressing the issue is by attempting to obtain the approval of your lender(s) to a “short sale”. A short sale involves selling the property for less than the outstanding amounts due on your mortgage(s) and submitting an application to your lender(s). Usually, the lenders will have already obtained a valuation for your property, which is known as a Broker Price Option (BPO), and will generally be receptive to a short sale application if the net proceeds will be equal to or greater than such valuation, regardless of the amount owed.
Each and every short sale that has been successfully negotiated with our client’s lender, requires the forgiveness of the balance due on the mortgage and overwhelmingly provides the client for relocation expenses, the amount of which varies from case to case.
The application process is time consuming, frustrating and requires precision. Our firm has been handling short sales since the Subprime Mortgage Crisis and has the experience and expertise to help navigate you through the process to closing.
Deed in Lieu
In the event that you have been unsuccessful in obtaining the approval of your lender to a short sale and only have one mortgage on your property, most lenders look favorably at offering what is called a “Deed in Lieu of Foreclosure”. This involves executing a Deed transferring title of your home to your lender, thereby eliminating the often time consuming and expensive foreclosure process and sheriff sale. The consideration for a Deed in Lieu of Foreclosure, that most lenders will agree to, is forgiveness of any deficiency owed on your mortgage and the payment of relocation expenses.