Loss Mitigation Options In Florida Foreclosure Cases

For homeowners, the foreclosure process is like death by a thousand cuts, especially now, when existing moratoriums on evictions and other aspects of the foreclosure process could end at any day.  The mortgage lender cannot formally start the foreclosure proceedings until you are 120 days late on payments on your mortgage loan, but those 120 days are as agonizing as the months that come after them.  The feeling is ever-present that you would be able to end this nightmare and stay in the house you have worked so hard to buy and maintain if you could only put together a little bit of money, but the source of your financial hardship (such as an acrimonious divorce or medical bills from an illness so serious that you still have not been able to go back to work) is not going anywhere in the foreseeable future.  Lenders are required to notify you, after each missed payment, of alternatives to foreclosures.  These are called loss mitigation alternatives because they can reduce the financial losses sustained by the lender and the homeowner.  If you are struggling to make your mortgage payments, contact a Boca Raton foreclosure defense lawyer.

Cutting Your Losses: Short Sales as an Alternative to Foreclosure

A short sale is a last-ditch effort to avoid foreclosure.  In a short sale, the homeowner and the lender agree to sell the house to the highest bidder, even if the amount is less than the amount owed on the mortgage.  Short sales sometimes happen when the mortgage is upside down, meaning that the principal balance you owe is higher than the value of the house.  The good news is that, if a short sale goes through, your mortgage debt goes away.  The bad news is that you do not get to stay in the house, nor do you get a sum of money that would enable you to buy another house.

Loan Modification Can Help You Stay in Your Home

If you are falling behind on mortgage payments, the lender should also notify you about loan modification options.  A loan modification often enables you to extend the term of your loan, which lowers your monthly payments.  If you agree to a loan modification, the lender usually requires you to keep up with the new payments for a trial period before making the modification official.  The bad news is, while the trial period is going on, the lender will still notify you of how much you will owe if the lender does not agree to a permanent modification.  The good news is that, if you keep up with your new payment amount during the trial period and the loan modification becomes permanent, you will get to keep the house.

Reach Out to Us Today

Despite what your mortgage lender might try to convince you, foreclosure is not inevitable.  A foreclosure defense lawyer can help you explore the alternatives to foreclosure and weight your options about which one is best.  Contact Nowack & Olson, PLLC for help today.

Resource:

consumerfinance.gov/ask-cfpb/i-got-a-letter-from-my-mortgage-servicer-about-my-application-for-help-to-prevent-foreclosure-of-my-mortgage-can-you-help-me-understand-some-of-the-terms-en-1807/