If you are no longer able to pay your mortgage or have ceased payment, there are still options accessible to you. The first option is mortgage adjustment. This entails your lender decreasing your monthly mortgage payment and potentially reducing the outstanding loan balance. The eligibility for mortgage adjustments is reliant on the homeowner’s financial circumstances and the disparity between the home’s value and the amount owed. Generally, the home is considered “underwater,” indicating that the owed amount exceeds its worth. Modification enables the homeowner to retain ownership of the home while making reduced monthly mortgage payments.
Another alternative to foreclosure is a sale at a discounted price, commonly referred to as a short sale. It is essential to obtain a deficiency waiver in this case to prevent lenders from pursuing the homeowner for any remaining debt after the short sale. A deed-in-lieu of foreclosure is another option where the homeowner voluntarily transfers the property to the lender, effectively avoiding the foreclosure process. However, this approach may face hurdles if there are secondary mortgages or other liens on the property.
Moreover, lenders often offer financial assistance, such as payment for relocation expenses or “cash for keys,” as part of the short sale or deed-in-lieu process.
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