Why you want to Avoid a Foreclosure

If you have an up-side down loan that is causing you a true hardship, never just walk away!

A foreclosure will follow you long after it is finally removed from your credit. If you ever apply for a loan, a job, etc. you will see this
question staring you in the face -Have you ever had a foreclosure? If
you say "no" it is fraud.

Applying for a Loan Modification or Short Sale can be time consuming and stressful. However, by going through the process and
documenting that you tried your best and were still turned down, you can
use this documentation to apply for another home loan later.

Ways to demonstrate your willingness to work with the bank can include:

1. Pictures of your home, showing how well you maintained it.
2. List your home for sale ASAP, preferably before you miss payments.
3. List it with an agent so they can enter it in
the MLS for maximum exposure.
4. Price it right - include a comparative market analysis.
5.
Show that the bank would not participate in
the HAFA Program.
6. If you are turned down for a Loan Mod or a Short Sale, ask for a reason in writing.

You will need an experience realtor who specialists in Loan Modifications and Short Sales to find a buyer and negotiate with
Loss Mitigation on your behalf.

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Comment by Jan Baron on August 16, 2010 at 12:48pm
I have been working as a Home Retention Consultant for almost a year now. My company is retained by the banks to reach out to distressed homeowners and help them with their loan modification paperwork. I've seen enough to know that I would never apply for a modification myself.

My last visit was heart-breaking. A single mother was working with her bank for over a year to get a modification. During this time, she was making trial payments while waiting for her permanent modification. I was sent there to tell her that her home was already foreclosed but the deed had not been recorded yet. She had one last chance to reinstate her loan which meant paying all the back partial payments she missed during her trial mod, plus interest, late charges, attorney fees, etc.

She was shocked because she had just spoke with the bank that morning, giving them more requested documentation. Her home was gone three days later.

Before attempting a loan modification by yourself ask:

1. Are late charges and interest accuring while I'm waiting for my permanent mod?
2. Are my trial payments being reported to the credit agencies as deliquencies?
3. Has a Notice of Sale been filed?
4. Who owns my loan - who is the investor? - maybe you can appeal to them.
5. Will I be issued a 1099C for my taxes?
6. Will the terms be an ARM that will go up after 5 years?
7. Will the deficiency principal be added to the back of my loan?

Don't go it alone. Contact a HUD approved counselor, but remember there are certain things about the process that they are not allowed to tell you and they are paid by HUD based on the number of homeowners they counsel, not on the number of successful outcomes.

The loan modification process is very similar to the short sales process, so reach out to a Certified Short Sale Professional who is willing to donate some time to help you, or look for a nonprofit H.E.L.P. Certified Realtor who will help you for free.
Comment by Mike Linkenauger on August 11, 2010 at 8:31am
Hi there Rosie! You can search agents on this site by going to the members tab and typing in the area you are looking in in the blank. All agents who service those areas will pop up!
Comment by Rosie Garcia on August 10, 2010 at 2:10am
I need an agent in Porterville, CA. for a short sale. I am in Los Angeles- Porterville is too far for me. Please call me or email me. thanks, Rosie

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