What Should I Do If the Bank Threatens to Foreclosure?

There are a few retention options to consider if you live in New York and are currently facing the possibility of having your home foreclosed upon.

A Retention Option: What Is It?

Retention options, to use “bank speak,” are alternatives for a homeowner to stay in their house even in the event that they fall behind on their mortgage payments. Among these choices are:

  • Modification of Mortgage Loan
  • Goodwill Sale / Goodwill Short Sale
  • Reward/Short Reward
  • Restoration / Partial Restoration
  • Patience
  • Remortgaging

Modification of Mortgage Loan

With this option, you can adjust your existing mortgage to more easily manage your monthly payments. To make your loan work for you, you, your foreclosure attorney, and your mortgage holder will need to renegotiate it for better terms. It is possible to extend the period, lower the interest rate, and add a partial deferment at the end. Because the modified loan incorporates your past due balance into the new principal to bring you current on the new loan, be advised that this frequently leads to a greater final loan amount than you began with. Your lender can choose to move some of the amount you owing to the rear of the loan in order to make the modification work, saving you from having to pay the whole amount due at once. Generally speaking, your new modified monthly payments will be somewhat less than your previous mortgage payments or almost the same.

A mortgage loan modification involves more than just making a request. To gather all of your documentation, arrange a review with your lender, negotiate the terms of the modified loan, request a temporary modification trial so that you can demonstrate your ability to make the new payments, and ultimately approve the new loan with the lender, you will need the assistance of your foreclosure lawyer. Additionally, your foreclosure attorney may file an appeal or request a review of the decision if you believe your lender has not been operating in good faith at any moment.

Goodwill Sale / Goodwill Short Sale

If you are aware that you will eventually be able to repay your mortgage, but your lenders are refusing to give you the time you require, you might want to consider a friendly sale. A “friendly ally”—someone who can afford to buy your house from you—such as a friend, relative, or real estate investor—will be necessary for this. In a friendly sale agreement, your buddy will buy your house, settle with the original lenders, and let you continue living there while renting out your residence. The ally will then sell you your home back once you’ve recovered and restored your credit. If you trust the wrong ally, this choice may be dangerous, so be sure your foreclosure lawyer is involved in all discussions and agreements.

 

Reward/Short Reward

You can even halt a foreclosure by paying out the entire mortgage if you have won the lottery or received an unexpected inheritance. Additionally, your foreclosure attorney might be able to work out a short payback rather than a short sale if the current value of your home is less than what you originally paid for it.

 

Restoration / Partial Restoration

In a manner similar to the previous example, your lender can easily restore your current mortgage and halt the foreclosure process if you unexpectedly find yourself in a position where you can pay off your debt. Once more, if the value of your house has dropped significantly, consider discussing a brief reinstatement with your lenders with your foreclosure attorney.

 

Patience

You can temporarily suspend your mortgage payments by requesting a forbearance. You will have to work out a time frame with your mortgage holder, your foreclosure attorney, and yourself for when your monthly payment will be reduced or waived. You will be required to pay the remaining months in full at the conclusion of the prearranged time frame. This may be paid in full now or over the course of a deferment arrangement, which extends the loan’s maturity date by the number of missed payments.

 

Remortgaging

It is typically nearly impossible to refinance a debt on which you are already in default. But just as in a friendly sale, you might know someone who can co-sign a loan for a refinancing to update your mortgage. See if this is a good alternative for you by speaking with your foreclosure lawyer; this can be a difficult scenario.

For more information about retention options, and the tools that a good foreclosure attorney can use to help you, click here – https://www.ny-bankruptcy.com/retention-options-in-general-for-distressed-real-estate

 

Next Steps:

It is easy to become overwhelmed by the amount of information available about the various retention option programs. For a free consultation, get in touch with New York foreclosure lawyer Ronald Weiss if you’d want to speak with a kind, informed, and human person. He can assist you in initiating the process and advise you on which mortgage delinquency plan, if any, is best for you. Give 631-223-4810 a call to begin your journey toward a new beginning.