You Have Three Options to Avoid Foreclosure

A 'Foreclosure Start' is when the process of foreclosure action begins with the lender's first step of legal action. In judicial states it becomes recorded as 'Lis Pendens' in non judicial you will hear about a 'Notice of Default' being recorded against the property. Most lenders will always be ever so kind and write a 'Letter of Intent' on or around the sixtieth day of non payment.

According to the D.C.-based nonprofit homeownership research and advocacy group the Center for Responsible Lending (CRL), a dismal milestone was reached over the weekend – the organization says one million new foreclosures have been filed so far in 2009.

CRL’s news comes on the heels of last week’s first quarter 2009 National Delinquency Survey by the Mortgage Bankers Association, showing that 12 percent of all mortgages are now delinquent – the highest level since the industry trade group began compiling delinquency numbers 37 years ago.

Michael Calhoun, president of CRL, called the rapid escalation in foreclosures alarming. “It’s easy to think, ‘Well, that’s tough luck for the families that lose their homes.’,” Calhoun said, but he cautioned, “The truth is that foreclosures are costing neighboring families hundreds of billions of dollars and dragging down the entire economy. Foreclosures started today’s crisis, and foreclosures will keep the crisis going if this epidemic continues.”

The Center for Responsible Lending projects 2.4 million foreclosure starts in 2009. The organization warns that these foreclosures will reduce the property values of some 70 million nearby homes by a total of $502 billion – about $7,200 per family. Through 2012, CRL said, these numbers will rise to at least 9 million foreclosures that will cost 92 million neighboring families $1.9 trillion in lost home value.

The center points out that the industry’s track record proves loan modifications that fail to lower a homeowner’s monthly payments are not likely to succeed. The Obama administration’s foreclosure relief plan, however, includes stronger incentives for servicers to pursue more sustainable loan repairs. And CRL says these new guidelines encourage earlier intervention and loan modifications more likely to reduce monthly payments — tools designed to stabilize the housing market and keep people in their homes.

CRL points out though, that while the industry waits for the next wave of mortgage modification programs to be put into place, a new foreclosure starts every 13 seconds – tallying nearly 6,500 each day. The organization has sent out an urgent call to lenders and loan servicers, “to work with homeowners in good faith to dramatically increase loan modifications that actually stop foreclosures and keep people in their homes”.

Option number one is a 'Loan Modification'
Option number two is a 'Short Refinance'
option number three is a 'Short Sale'

beyond those you can have the option of a 'Deed in lieu' or 'Foreclosure' itself
which we obviously want to do anything to avoid. You can make argument for forbearance agreement but that really fits under the 'Loan Modification' option. The
first three options all avoid the 'F' word!!

-Christopher Rockey