Trying to Find Answers and Options?
There Is Free Foreclosure Help. If anyone tries to charge you in advance for help or tells you that you cannot sell your Anchorage or Eagle River home in order to avoid foreclosure, they’re not legitimate.
If you’re behind on your mortgage, or having a hard time making payments, we want to get you in touch with a HUD-approved housing counselor — they’ve been sponsored by the U.S. Department of Housing and Urban Development. Your counselor can develop a tailored plan of action for your situation and help you work with your mortgage company. They’re experienced in all of the available programs and a variety of financial situations. They can help you organize your finances, understand your mortgage options, and find a solution that works for you.
Just last week, we talked with a lady who is about to lose their Anchorage home due to foreclosure. She was panicked when she asked “What can I do?” She and her husband have been under financial pressure for some time now with extended medical bills and minimum payments on their credit cards that finally brought their finances to the breaking point. Like many people who face foreclosure, she saw it coming, but they didn’t act soon enough. They had spent savings to keep things going. She kept hoping things would finally work out, as most of us do when times get tough. She was now looking at spending their retirement. Their best answer was ultimately to sell their home and keep as much equity as possible and their retirement.
What Can You Do?
First and foremost do what is best for you, your family and your long-term financial health.
If you are worried about being able to keep up on your house payments, you must act quickly. The longer you wait, the greater the chances are that you could lose not only your Anchorage or Eagle River home but also your equity, and the more limited and expensive your options become.
Ask for A Break: Your lenders may allow you to make lower payments for a period of time, or tacking missed payments on to the end of your loan. To decide whether you truly qualify, the lender will require you to fill out paperwork demonstrating the hardship and your ability to get back on your feet. You will need to provide a budget. Be certain to get all agreements about payment arrangements in writing, and keep a file with copies of correspondence with the lender.
Get Help: If you cannot work things out with your lender, either because your lender is uncooperative or you feel overwhelmed, you still need to get help. The Department of Housing and Urban Development maintains a list of HUD-approved counseling agencies that may be able to help you avoid foreclosure you should definitely contact one of these agencies for help especially if you have an FHA or VA loan, since these types of loans come with some good programs designed to help keep you keep your home.
Refinance: If your credit hasn’t been negatively impacted yet, you still have equity your willing to risk, and you can get a loan at a decent rate, you may want to refinance or take out a home equity loan to help you ride out the storm. Be extra careful with this option. If your problems still last longer than you expected, you may find yourself still in a financial jam but with no equity left in your home. If you aren’t able to recover as quickly as you hoped, you could be forced to pay back debts that would have been wiped out in bankruptcy. Be especially careful about paying off credit card debt with home equity.
File for Bankruptcy: A bankruptcy attorney can help you decide whether it makes sense to file in order to keep your home. You will still have to make your mortgage payments if you go through bankruptcy, but you will have the protection of the court while you catch up. An attorney who specializes in bankruptcy will likely be familiar with foreclosure laws, and may also be able to help with other issues such as predatory lending, violations of consumer protection laws, or other legal problems.
Know When to Sell Your Anchorage or Eagle River Home. Consider the best answer maybe selling your current home and preserving as much of your savings, retirement and equity as possible. You must be realistic about the sales price you require and the time involved to sell it. You will not be able to get top dollar if you need a quick sale or you cannot pay for necessary repairs.
If you have little or no equity in your home, you may have to work with a real estate investor who can “short sale” your home, which means the investor gets the lender to agree to accept less than what you owe on a sale. There are times where this strategy can allow you to sell your home and quickly move on with your life.
By keeping your credit intact you will have lots more opportunities to recover quickly rather than taking the hit to your credit score a foreclosure will cause and the 6 – 10 years it takes to clear from your credit history.
Give Your Home Back to Your Lender. Keep in mind that if you allow your home to go into foreclosure, your lender may be able to get a “deficiency” judgment for the difference between what you owed (including attorney fees and other costs) and what your home sold for at foreclosure auction. (Not all states allow lenders to collect deficiencies.) Get an agreement in writing from your lender that you will not be held responsible for the “deficiency” – the difference between what you owed and what was paid. Also keep in mind that the lender may report any forgiven balance as “income” to the IRS, and you may have to fill out additional paperwork showing the IRS you are insolvent in order to avoid paying taxes on that phantom income. So, doing what you can now to sell your home and save your equity and credit can also save you from more headaches and financial costs down the road.
If you have additional questions and want to discuss the options you have please contact Frank Irwin at Frank@AnchorageForeclosedHomes.com.