Options for Arizona Homeowners Facing Foreclosure
Thousands of homeowners are in distress in our Metro Phoenix real estate market! Are you behind on your mortgage payments? Have you, or will you, lose your job and soon not be able to make future mortgage payments? Have you received a call or letter from your lender that they have started the foreclosure process?
Remember, a bank does not want to foreclose on your home but the bank will absolutely foreclosure on you if you do not seek foreclosure prevention options quickly.
Here is a list of options to foreclosure for Arizona homeowners:
In order to qualify for reinstatement of a mortgage, all missed payments, late fees, and legal fees that are due up until the date that the loan is reinstated must be paid in full.
Re-Payment Plan or Forbearance
If an Arizona homeowner does not have the cash to pay in full all of the missed payments and legal fees, then there are other options that also reinstates the mortgage. The lender allows the Arizona homeowner to pay the amount due over time, or they place the amount due at the end of the amortization of the loan.
Sell the Property
If you have some equity in your Arizona house, you can sell it and cure the foreclosure. A licensed Arizona Realtor experienced in the foreclosure process can save as much of your hard-earned equity as possible. When choosing an Arizona Realtor, search for a Certified Distressed Property Expert (CDPE) … someone who understands the foreclosure process, foreclosure timelines, and prices the property to maximize equity while avoiding foreclosure
Rent the Property
In some cases, an Arizona homeowner facing the prospect of foreclosure may be able to rent the property if the mortgage payment is low enough to allow the owner to rent and keep up the mortgage payments.
If the Arizona homeowner’s credit has not been too badly damaged and there is sufficient equity & income, refinancing may be an option. This is typically a short-term solution since mortgage payments on the property may go up considerably due to refinancing.
Some Arizona homeowners who can afford their mortgage payments or very close to their mortgage payments may qualify for a mortgage modification by their bank.
A short-refi is the refinancing of a home that usually involves an interest rate and principal balance reduction. When applying, the homeowner will have to show a hardship and demonstrate the ability to pay the new mortgage through a fully documented qualification process
Deed-in-Lieu of Foreclosure.
Called a “friendly foreclosure,” the homeowner gives the deed to the Arizona property back to the bank. This is not a good option for anyone with equity in their home since they give up the right to the property and any equity therein.
A bankruptcy may stop a foreclosure and allow a homeowner to reorganize his debt while keeping his property. Most of the time, bankruptcy only stalls the foreclosure, because if the homeowner is unable to make payments after bankruptcy, the house will foreclose anyway. Another major drawback to bankruptcy is the difficulty in selling the property once the homeowner enters the process.
Probably the most popular solution to foreclosure and maybe even the most effective! Learn more about the Arizona Short Sale Process