It is very apparent as we visit with more and more distressed homeowners here in the Huntington Beach and Los Angeles/Orange County area, that most do not have a clear idea of what their options are. Those options vary depending on what the homeowners goal is with regard to keeping their home.
In one case, for example, the homeowner refinanced into a negative amortization adjustable loan sometime within the last three years or so, and now is faced with rising payments and an adjusted high interest rate. They always thought they would refinance again, but now have little or no equity required for refinance, and are unable to sustain the higher monthly payments. At the same time they still have a good job with steady income, and really want to stay in their home. These folks should definitely work with their lender to try and do a loan modification. In many cases now, the lender has instituted a loan modification program that the borrower may even be able to access online.
Take the same example for a homeowner who has lost their job. Loan modification would not be an option since they cannot show income even for the modified loan payment. In this case the homeowner’s next best option to avoid a foreclosure would be to apply with their lender for a short sale.
There are also many cases in communities around the country, including our area of Huntington Beach and Orange County, where homeowners are so far underwater with regard to home value vs loan balance, that meaningful loan modification may not be a viable option. This is especially true if financial hardhsip is also involved. In these cases a short sale is also the best option.
The short sale process is the best option for all parties when the only other viable option available is foreclosure. In doing a short sale, it is important to work with a realtor who has gained expertise in this specialty area, and who can help a distressed homeowner through the often difficult, complicated, and sometimes long process. Tony Hunthausen is a Certified Short Sale Professional and a Certified Distressed Property Expert.
There are other options available that might be appropriate in certain circumstances like forbearance and deed in lieu of foreclosure, but loan modification and short sale usually end up being the two primary options under consideration by most homeowners.
As they see themselves moving toward one of these options, many homeowners experience great anxiety and worry about not only the basic process, but whether or not they will end up on the street without a place to live. Call us or an expert realtor in your area, and we can help make sure this doesn’t happen to you, and that you fully understand your rights and the solution you should pursue to either save or sell your home.