Foreclosure Solutions
The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Harriman-area residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:
Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.
- Benefit: Does not require the mortgage company or lender's approval.
- Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.
Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
- Benefit: Allows the homeowner to make back payments over time.
- Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to 'qualify' for forbearance.
Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.
- Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
- Drawback: Requires that a homeowner 'qualify' for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.
Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.
- Benefit: Allows homeowner to keep property indefinitely.
- Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.
Deed in Lieu of Foreclosure
Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.
- Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
- Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.
Bankruptcy
Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.
- Benefit: Does not require lender approval.
- Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.
Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.
- Benefit: In some cases, this will lower payments.
- Drawback: In today's market, a refinance will almost always raise mortgage payments, and is an expensive process.
Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.
- Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
- Drawback: Must be active military to qualify.
Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.
- Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
- Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).
Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.
- Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
- Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.
This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options.
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RE/MAX Benchmark has affiliated with the most successful and most experienced associates in our area giving them the opportunity to be in business for themselves but not by themselves. Our associates average 14 years experience and nearly 14 annual transactions each. That is seven times the Orange County Association of Realtors average. With nearly 640 transactions in 2009 totaling nearly $250 million dollars in sales,
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About Marty Remo
I started in Real Estate at the age of 18. That was over 20 years ago. I have been very fortunate to have gained so much experience prior to the evolution of the internet in Real Estate. Honestly, it gives us a competitive advantage. I understand the way that real estate agents and brokers have operated in the past. Respectfully, everything has changed!
Testimonials:
“Marty and I have had a number of mutual clients purchasing and selling real estate in the Hudson Valley. It was always a pleasure to work with Marty due to his professionalism and attention to detail.” March 9, 2009"
David Stiles Fri May 21
"Marty is very knowledgeable about the market place, he uses technology to help meet a customers’ needs from either prospective of selling or buying real estate, very innovative in financing and concessions to make the deal work for both parties - Highly recommended"
John Dorozynski Mon Mar 1
"I have known Marty for many years and have found him to be a professional who works tirelessly to fulfill the needs and expectations of his clients. Marty is hard working, creative and always gives his best. I heartily recommend him"
Bob Duncan Wed Feb 10
"“I selected three attributes for Marty only because I am limited to that many. in 2009, Marty directed the sale of my mother-in-law's home shortly after she passed. In a market that was full of competing product with not much activity, Marty's in-depth analysis, strong client base and excellent knowledge of loan products brought us to a close of escrow in fewer than 100 days. As a real estate professional myself, with over $250 M in multi-family acquisition volume, I know a competent, qualified and motivated peer when I have the good fortunte of working with one. Many thanks to Marty for completing a demanding task in a demanding environment for a demanding client who was 3,000 miles away. I'd use Marty again in a heartbeat if the opportunity provided - thanks again Marty!!!”"
Chris Loche Wed Jan 27
"Top qualities: Great Results, Personable, Expert “Marty is a professional who knows how to negotiate and make a sale happen. I not only recommend him b” January 28, 2010 "
Ken Fliesser Mon Mar 9, 2009
"Marty is a very knowledgable, professional Realtor, with the highest standards. His clients all rave about the service he and his associates offer. I highly recommend Marty"
Colin Seitz Mon Mar 9, 2009
"“I was first connected to Marty back in 2005. I have worked with him and his wife Dawn on several real estate transactions since that time from a buyer and seller perspective. To say that they are both assets to the real estate industry would not do them enough justice. They are extremely personable, knowledgeable and held with high integrity. Remo Realty is both a professional and personal contact that will travel with me for years to come. They won't steer you wrong!” February 1, 2010" Lisa Fong Mon Feb 1
"“Having known Marty for many years, when it came time for us to sell our condominium, we immediately contacted Remo Realty. Marty not only knows the industry inside and out, he is a dedicated, reliable, and honest businessman. He works tirelessly for the client and is always looking for new and innovative ways to help his clients. Marty is also patient and understanding. He has an innate ability to reduce the stress levels that can be associated with real estate transactions. Thanks to Marty we were able to sell our condominium within one week (while we were on vacation)! When we ever decide to sell our current home, we will be sure to contact Remo Realty first.” "
Russell Hock Sun Jan 31
"“During the real estate boom I was in the market to relocate my wife and new born daughter back to Orange County New York. A listing with Remo Realty brought me to meet Marty. He displayed great patience while he showed us house after house. After listening to our plans, needs and wants he would talk me out of homes that didn’t fit our criteria. One house in particular was on our “dream” list and posed a substantial risk if either my job or the market went south. Well, we all know how the market did. Marty’s professionalism, knowledge and guidance helped me avoid the situation of being in an upside down mortgage in a home that was more than what I needed. What’s remarkable is that he did this during the height of the real estate boom when money was free flowing. It’s Marty’s moral and ethical character that sets him far apart from just another real estate agent. And why my family is secure and comfortable in our home, still."
Edward Ng Thu Jan 28
"“When it was time to select a realtor to help us sell our home I was fortunate to have several recommendations for Remo Realty in Monroe, NY. At a time in the market with many houses like ours Marty and his staff didn't treat us like just another customer. The personal attention to detail and timeliness of their service were just just what I needed. Between having a couple of open houses and also several individual visits by potential buyers we were able to close the deal in just a few months."
Chris DiBernardo Thu Jan 28
"“Marty and his wife Dawn worked tirelessly to help us find the right home for our family. We went all over orange county with them and they were energetic, enthusiastic and knowledgeable every step of the way. Recommending the Remo's is easy as I would use them again in a second!” "
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