If You Do Not Qualify For A Loan Modification, What’s Next?

paperworkEven though the Federal Housing Finance Agency has come up with a plan to help millions of homeowners from losing their homes to foreclosure by working out new payment terms, there are still many people out there who will simply not qualify for this assistance. If you are finding yourself in this predicament, there are some things you can do to improve your situation.

Before anything else, give your lender a call to try and work out a payment arrangement that works better for you. This is your first move, though if this is to no avail you do have other options.

You might consider a short sale, which is when a lender will accept less than what is due on the loan. In this instance you will avoid foreclosure, but you risk the possibility of having to pay taxes on the short.

Another option is to transfer your title in exchange for the cancellation of your debt, otherwise known as a “deed in lieu of foreclosure”. This is an arrangement in which the owner of a home turns over the deed to their home rather than going through the foreclosure process. This saves you the stress of having your home foreclosed upon and allows you to make arrangements ahead of time, and it saves the bank the time and money of the foreclosure. You will lose your equity, but you will not damage your credit.

If there are any specific questions I may be able to answer feel free to email me at steve@stevelevine.net