Here are the most common options you have when facing foreclosure:

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Option 1: Reinstatement.
This is a lump sum payment that includes all arrearages associated with your mortgage such as missed payments, late fees and attorney fees, etc. that if paid in full would bring your account with your lender current. We can assist you in determining the exact amount required to reinstate your loan should you consider that to be your best option.

Option 2: Forbearance.
This option is available only through your lender. In this process a payment plan is implemented to make up all of the arrearages referred to in Option 1. The arrearages are spread out equally over a set period of time, usually 6-12 months, and will be due in addition to your current monthly mortgage payment. This option is all but gone due to the current lending environment.

Option 3: Loan Modification or Partial Claim.
This option, like the Forbearance, is only available through your lender. This process actually involves the restructuring of your loan and in some cases a brand new loan is issued. The facets of your loan that can be affected are the amortization schedule, the interest rate, principal balance of you loan in some cases and the type of loan. The arrearages you have with the lender will be rolled into you loan, in essence bringing you current, and you will then begin making payments as usual. Lenders will typically require a payment up front from you to start the plan and provide you with a trial period before making the change permanent. The actual criteria and options available are determined on a case by case basis.

Option 4: Refinance.
This option involves going to a new lender and originating a brand new loan. This option has lost it’s popularity due to much tighter credit guidelines, borrower’s credit that may be too severely damaged to get approved and/or their house will not appraise for the amount needed to pay off the arrearages. Should you be able to qualify for the refinance of your loan this is a great option. If qualifying is not a possibility then a loan modification would be the next best alternative if keeping your house is the goal.

Option 5: Listing with a Realtor.
Listing the property with a realtor using the normal sales process is appropriate if you have enough time to get it sold before the lender executes the foreclosure and you have enough equity to cover all of the normal costs that will be associated with the sale of the property. If you have little equity, you may be required to come to closing with money out of pocket to pay the Real Estate agent’s commission and closing costs. The point here is even though selling your home may involve using a licensed realtor it will also likely require the use of foreclosure avoidance methods most realtors are not effectively trained to implement or execute.

Option 6: Deed In Lieu.
Although this is often offered as an alternative by the lender, it actually speeds up the Foreclosure process. In a Deed in Lieu, the homeowner voluntarily surrenders ownership of their property to their lender and is referred to as a "Voluntary Foreclosure."
Deed In Lieu benefits the lender by saving them the cost associated with the full Foreclosure process and allows them to gain control of the property much quicker. For the homeowner, a Deed In Lieu will impact your credit to the same extent as a if the whole Foreclosure process had been allowed to take place.

Option 7: Bankruptcy.
Filing Bankruptcy only postpones the Foreclosure process, it does not stop it. If you file Chapter 13, you must agree to re-pay all of your debts including your mortgage.

If you file Chapter 7, your house becomes property of the Bankruptcy Trustee. If you have equity, the trustee can require the sale of your home to satisfy your creditors. If you don’t have equity the court will allow the lender remove the house from the bankruptcy and proceed with the Foreclosure. Should you already be in bankruptcy CORE 1 can still assist you in the sale of your home and will work with your attorneys to do so.

Option 8: CORE1, Foreclosure Prevention Professionals
At CORE 1 we specialize in helping homeowners avoid foreclosure. This is all we do so with that in mind CORE 1 has elected to separate ourselves by becoming members of the National Association of Foreclosure Prevention Professionals (NAFPP) and the Kansas City Better Business Bureau which has a published set of criteria that we agree to abide by when working with our clients. Even if all you need is to have your questions answered please feel free to call us as 816-560-8494.

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